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2024-06-04 Council MinutesEDMONDS CITY COUNCIL MEETING APPROVED MINUTES June 4, 2024 ELECTED OFFICIALS PRESENT Mike Rosen, Mayor Vivian Olson, Council President Chris Eck, Councilmember Will Chen, Councilmember Neil Tibbott, Councilmember Michelle Dotsch, Councilmember Susan Paine, Councilmember Jenna Nand, Councilmember 1. CALL TO ORDER/FLAG SALUTE STAFF PRESENT Susan McLaughlin, Planning & Dev. Dir. Todd Tatum, Comm., Culture & Econ. Dev. Dir. Rose Haas, Planner Casey Colley, Youth Commission Coordinator Jeff Taraday, City Attorney Scott Passey, City Clerk Jerrie Bevington, Camera Operator The Edmonds City Council meeting was called to order at 6:59 pm by Mayor Rosen in the Council Chambers, 250 5t' Avenue North, Edmonds, and virtually. The meeting was opened with the flag salute. 2. LAND ACKNOWLEDGEMENT Council President Olson read the City Council Land Acknowledge Statement: "We acknowledge the original inhabitants of this place, the Sdohobsh (Snohomish) people and their successors the Tulalip Tribes, who since time immemorial have hunted, fished, gathered, and taken care of these lands. We respect their sovereignty, their right to self-determination, and we honor their sacred spiritual connection with the land and water." 3. ROLL CALL City Clerk Scott Passey called the roll. All elected officials were present. 4. PRESENTATIONS 1. LGBTO+ PRIDE MONTH PROCLAMATION Mayor Rosen read a proclamation proclaiming June 2024 as LGBTQ+ Pride Month in the City of Edmonds and encouraging all residents to celebrate the progress within our society towards justice, equality, and fully civic recognition for LGBTQ+ persons and to join together in the struggles that remain to achieve true justice and equality. He presented the resolution to Diversity Equity, Inclusion and Accessibility (DEIA) Commissioner Rowan Soiset. Rowen explained they run a group, Edmonds Queer Youth Alliance, and are also part of the City's Community Champions program, helping to do outreach for the City's comprehensive plan. They were honored to be presented with the proclamation on behalf of the LGBTQIA+ community in Edmonds. Being Edmonds City Council Approved Minutes June 4, 2024 Page 1 able to stand here with the community is a dream come true. Rowen thanked everyone who has put in a tremendous amount of effort to make the celebrations this month possible, thanking Nick Falk for being the catalyst and putting together the City's first ever Pride celebration last year and continuing to lead the planning for this year's celebration, Under the Rainbow, Pride of Edmonds, Edmonds Queer Youth Alliance, the Arts Spot, PFLAG, Sno-Isle Libraries, Edmonds Downtown Alliance, Megan Luttrell, Todd Tatum, Edmonds Center for the Arts, and the Edmonds DEIA Commission. Rowen thanked their parents for being their biggest cheerleaders. While celebrating Pride Month, it is important to remember Black trans women who had to fight to even have a chance of speaking at Pride and who made it possible to stand for them to be here today. Honor and learn from their resilience, radical activism and deep care for their community. Rowen called upon the LGBTQIA+ community and their allies to honor their legacy by continuing work this Pride Month and beyond because while Edmonds is moving forward, there are many places all over the world and even in Washington that are actively moving backwards. Growing up trans in Edmonds wasn't easy; it was hard to find community and they faced a lot of hardships in school and in life due to who they are. There were days when they didn't even think they would make it this far. To anyone who has felt or feels the same way, Rowen wanted them to know they were loved and there is an amazing community in Edmonds ready to accept and support them with open arms. To see the City stand proud in its support of the LGBTQIA+ community gave them hope it won't be as difficult for future generations and made them happy to say they live in Edmonds. Rowen hoped to see everyone at the multitude of fun events planned this month and wished all Happy Pride. 2. RESOLUTION RECOGNIZING RIDE TRANSIT MONTH Councilmember Paine read a resolution of the City Council of the City of Edmonds, Washington, designating June 2024 as "Ride Transit Month" and urging all people to join in the observation and to ride transit. She presented the proclamation to Brock Howell, Executive Director, Snohomish County Transportation Coalition (Snotrac). Mr. Howell explained Snotrac works to connect people and communities within Snohomish County and beyond with safe, accessible and equitable transportation. Snotrac is grateful Edmonds is leading the way, providing a great transit hub with the Sounder station and ferry terminal and soon light rail service accessible via a short bus trip. Snotrac is about creating affordable age and ability friendly communities for all people and transit is an essential part of that. Snotrac is happy to partner with Transportation Choices Coalition, a statewide organization that advocates for better transit across the state and are leading the charge on Ride Transit Month proclamation. Transportation Choices is sponsoring Ride Transit Day on June 14 at the Mariners/Ranger 7:10 p.m. game. People are encouraged to take the bus or light rail to the game; he was unsure if Sounder would be running special event trips to the game. Further information regarding that and other events happening this month is available at TransportationChoices.org. 3. YOUTH COMMISSION ANNUAL PRESENTATION & SENIOR RECOGNITION Youth Commission Coordinator Casey Colley recognized graduating seniors on the Youth Commission: • Lucy Calabro o Attending the College of William and Mary, majoring in Public Policy o Aspiring to work in Public Relations and Law Eemaan Bhatia o Attend the University of Washington — Engineering o Favorite part of EYC: promoting change and diversity to the City of Edmonds and working with and meeting new people o Hoping to stay involved with local government Edmonds City Council Approved Minutes June 4, 2024 Page 2 • Cassidy Otis o Planning to work in the medical field, attending community college working to become an EMT o Favorite part of EYC: group problem solving and the dynamic conversations • Mariana Yenter o Study business management at the Stern School of Business at NYU o Favorite part of EYC: Meeting new people and having an active role in the community • Sophia Gerdes o Going to attend University of Washington, planning on majoring in Biology Pre-Med o Favorite part of EYC: Working with nature • Joanna Na o Going to attend Boston University, majoring in Neuroscience o Favorite part of EYC: Being the secretary and taking notes during the meetings Ms. Colley wished the seniors the best in their future endeavors and thanked returning Youth Commission members. Chair Mariana Yenter and Commissioners Joelle Walworth and Charles Morgan presented: • City of Edmonds Youth Commission is a youth -led commission whose mission is to protect, preserve, and enhance the quality of life for Edmonds youth by advising City Council and the public on issues relating to youth policies, programs, and opportunities. Basics o Youth Commission had 3 open seats to fill with over 10 applicants o Focused on connecting with our community this year through events and Instagram o Assigned a new City Council liaison o Been a productive and fun year • Planning & Development Department o Met with Planning & Development Director Susan McLaughlin, Economic Development Director Todd Tatum, Parks, Recreation and Human Services Director Angie Feser and Urban Design Planner Navyusha Pentakota to learn about the comprehensive plan and the Landmark 99 project. • Youth & Senior Speed Talking at Edmonds Waterfront Center • You Are Not Alone o 988 Suicide & Crisis Lifeline o Youth Suicide Prevent Event — Rosehill Community Center, February 3 • Community Transit Presentation o Youth Ride Free Edmonds City Council Approved Minutes June 4, 2024 Page 3 • Annual Earth Day o Partnered with City, Sound Salmon Solutions and Tree Board • Annual Pine Ridge Park Ivy Pull • Puget Sound Regional Council Webinar o Toolbox: Planning — the Next Generation of Planners (April 26, 2024) • Instagram Posts • Members returning next year: o Charlie Morgan o Vivian Liao o Lydia Abuni o Lucy Lakefish o Joelle Walworth • Goal for next year o We hope to continue to exist as a commission as we believe we are vital to connect and advocate for the youth in Edmonds o We are an asset Councilmember Eck said she is genuinely impressed with all the Youth Commissioners and thanked them for their service to the community. She recognized they worked hard at school and choose in addition to homework and other activities to volunteer their time, brainpower, and ideas. She assured the commissioners that that matters and it counts and she and the community are grateful. What commissioners have learned and contributed will carry forward in their lives. Council President Olson said farewell to Mara who was her appointee, remarking she has done a fantastic job and she was very proud of her and all the commissioners. She has followed the Youth Commission's work all the years she has been on council and said they did themselves proud this year, doing amazing work, and making amazing choices of activities and involvement. She also thanked Ms. Colley for her leadership. Councilmember Paine thanked the Youth Commission for the work they have done, finding ways to contribute in ways the community has requested such as connecting generations with the speed talking event. Their work on climate change and suicide prevention has been very meaningful for all of Edmonds and their leadership makes an impact and is felt daily. She agreed the Youth Commission is an asset and thanked Ms. Colley for leading the commission. Councilmember Chen agreed the Youth Commission is an asset. He recognized their accomplishments for the City, community and themselves. He appreciated their efforts including outreach to their peers which is evident by the ten applicants for three openings on the commission. He was privileged to be one of the councilmembers who participated in the interview process and appointed Vivian Liao. He thanked the Youth Commission for they all do. Councilmember Dotsch, council liaison to Youth Commission, said she was impressed by how engaged commissioners are at meetings, their ideas and their follow through, and efforts to engage and get out in the community. The speed talking event was a huge hit with the seniors and the commission. She congratulated the seniors who are graduating and moving on and thanked the members who are returning. She thanked Ms. Colley for organizing the group which is sometimes like herding cats. Councilmember Nand thanked the commission and was glad her appointee, Lucy Lakefish, is a returning member. She wished the seniors well in their educational journey. Having more people apply than there are positions to fill is a good thing, but for anyone not appointed, she encouraged them to apply for other boards and commissions in the City. For example, as far as she knew, there was no age restriction for serving on Edmonds City Council Approved Minutes June 4, 2024 Page 4 the Mayor's Climate Protection Commission or the DEIA Commission. She was hopeful the Youth Commission was the start of members' journey in civic engagement, recognizing the importance of their perspective and participation in issues like economics, equality, climate justice, and intersectional justice. 5. APPROVAL OF AGENDA COUNCIL PRESIDENT OLSON MOVED, SECONDED BY COUNCILMEMBER TIBBOTT, TO APPROVE THE AGENDA IN CONTENT AND ORDER. MOTION CARRIED UNANIMOUSLY. 6. AUDIENCE COMMENTS There were no audience comments. 7. RECEIVED FOR FILING 1. WRITTEN PUBLIC COMMENTS REGARDING ADU CODE AMENDMENTS 2. OUTSIDE BOARDS AND COMMITTEE REPORTS 3. WRITTEN PUBLIC COMMENTS 8. APPROVAL OF CONSENT AGENDA ITEMS COUNCILMEMBER PAINE MOVED, SECONDED BY COUNCIL PRESIDENT OLSON, TO APPROVE THE CONSENT AGENDA. MOTION CARRIED UNANIMOUSLY. The agenda items approved are as follows: 1. APPROVAL OF COMMITTEE MEETING MINUTES MAY 14, 2024 2. APPROVAL OF COUNCIL MEETING MINUTES MAY 21, 2024 3. APPROVAL OF COUNCIL SPECIAL MEETING MINUTES MAY 21, 2024 4. APPROVAL OF CLAIM CHECKS AND WIRE PAYMENT 5. RESOLUTION RECOGNIZING RIDE TRANSIT MONTH 9. COUNCIL BUSINESS ACCESSORY DWELLING UNIT CODE AMENDMENT TO ALLOW FOR DETACHED ACCESSORY DWELLING UNITS — "EXPANDING HOUSING OPTIONS BY EASING BARRIERS TO THE CONSTRUCTION AND USE OF ACCESSORY DWELLING UNITS IN ACCORDANCE WITH HB 1337" Planner Rose Haas reviewed: Accessory Dwelling Unit Code Update Timeline o Council Introduction — November 14, 2023 o Planning Board Introduction — December 13, 2023 o Planning Board Discussion 1 — January 10, 2024 o Planning Board Discussion 2 — January 24, 2024 o Council Discussion 1 — February 27, 2024 o Planning Board Public Hearing — February 28, 2024 o Council Study Session — March 5, 2024 o Planning Board Discussion 3 — April 10, 2024 o Council Public Hearing — May 21, 2024 o Anticipated Council Adoption — June 4, 2024 Public Engagement o November 2023 — June 2024 ■ Created Edmondswa.gov/ADU Edmonds City Council Approved Minutes June 4, 2024 Page 5 ■ Held Webinar and Info Session on November 30, 2023 - 32 attendees ■ Initial Comment period from November 30- December 3Is' ■ February 28t' Planning Board public hearing ■ May 21 Council public hearing ■ 110 written comments considered and shared with council • What guidance did we use? HOUSE BILL REPORT EHB I7}7 u�4',�� �LmaXn rM` I.d; YY.e4..x. m.....i �... •.xn uN.n F1or.Nq.Y,: r.ea ��•.'�.a,, FIOl98 conaurrFs on WUSg4 0FYmum n. The ABCs of ADUs — aaryD�WpllnNawCngrgry iva aporn b pupY oFall aYn AAV poll son ■ 1 on moll ■■ • •�- THE EDMONDS CITIZENS' HOUSING COMMISSION WANTSTO HEAR FROM YOU. HB 1337 MRSC and Department of HARP Best Practices Commerce Guide Citizens Housing Commission Survey Why DADUs in Edmonds today? o In 2021, the Citizens' Housing Commission recommended updating the ADU code: ■ To include DADUs ■ To provide clear development standards ■ To eliminate conditional use permit o According to the 2021 American Community Survey, 21.5% of Edmonds' residents are over 65 years of age. O The most frequent over the counter ADU question: "Are DADUs allowed for `aging in place'?" What will HB 1337 require? o Commerce language will superseded, preempt, and invalidate any conflicting local development regulations if Edmonds does not adopt policy by June 30, 2025 O The requirements for the City of Edmonds will be as follows: ■ Allow two ADUs per lot (any configuration of ADU and DADU). ■ No owner -occupancy requirements. ■ Allow separate sale of ADUs. ■ No parking required within a half -mile of a major transit stop ■ Maximum size limitation no less than 1,000 sf of gross floor area. ■ Allow DADUs to be sited at a rear lot line when the lot line abuts a public alley. ■ No setback requirements, yard coverage limits, tree retention mandates, restrictions on entry locations, or aesthetic requirements that are more restrictive than for the principal unit. ■ Allow ADUs of at least 24-feet in height. ■ Impact fees cannot be more than 50% of fees charged for the principal unit or single family residences. • Planning board and staff recommendations include the following policies: o Ways the City's regulations can differ from the state's regulations ■ ADU size restrictions ■ ADU setback reductions Edmonds City Council Approved Minutes June 4, 2024 Page 6 ■ Parking restrictions ■ Impact fees Development Standards o AADUs and DADUs are subject to the same permitting requirements as any other dwelling unit and must meet all health and safety standards, including: ■ Building Codes, Energy Codes ■ Public Works requirements ■ Fire Code requirements ■ Utility requirements ■ Environmental Codes (Critical Area regulations, Tree Code) Staff and planning board shared recommendations o Limit ADUs to 1,000 sf of gross floor area on small lots (RS-6 and RS-8) o Allow ADUs to have up to 1,200 sf of gross floor area on one or two floors on large lots (RS- 10, RS-12, RS-20) o Require impact fees for ADUs that are 50% of the fees charged for a new principal unit o Allow a minimum 5' rear setback for ADUs on RS-6 and RS-8 lots that limit height to 15' o Decrease parking requirements ■ Rationale - Two parking spaces currently required for all single family homes - High cost of providing additional parking - Lot may not have space for additional parking - A 2020 study shows between 2012-2017, 70% of developments in Seattle with no parking requirements included parking Staff and Planning Board Differing Recommendations o Planning Staff: ■ Decrease rear setback requirements to allow for more flexibility on smaller lots (RS-6 and RS-8) - Allow a minimum of 10-foot rear setback for DADUs on small lots ■ No additional parking required for ADUs o Planning board: ■ Setback reduction incentives on small parcels only if property owners limit height of ADU to 15' to preserve privacy and views of existing neighborhoods in all zones - Allow a minimum 5-foot rear setback for ADUs on RS-6 and RS-8 lots ■ No additional parking required for the first ADU, one space required for second ADU o Follow up: Short term rentals (data compiled from AirDNA) o Current: ■ Edmonds Zip Code Population (98020, 98026): 58,846 (includes Esperance and Woodway) ■ Total single family parcels in Edmonds: 11,615 ■ AirDNA short term rental data analytics shows there are 163 short-term rental properties within the City, roughly estimated at 1.4% of the housing stock ■ STR/population: .003 o Comparison Cities (based on zi code) city Population # of STRs STR/ o ulation Redmond 99,699 431 .004 Walla Walla 43,249 332 .008 Poulsbo 32,857 240 .007 Se uim 30,505 537 .018 Bellingham 129,753 735 .006 Kailua-Kona 38,234 5,300 .139 Edmonds City Council Approved Minutes June 4, 2024 Page 7 o Per HB 1337, the City can restrict STRs in ADUs and require owner occupancy in ADUS used as STR Planning & Development Director Susan McLaughlin explained this issue was considered early in the drafting of the ADU legislation, how many STR there are in Edmonds. Although the data not crystal clear, it was great to find this data source and it roughly aligns with the numbers staff developed initially. These data analytics validate that the City has a really low number of STR, 1.4%, which could be an overestimation based on the total number of residential units in the City. If the City reached a tipping point of STRs, that could have an adverse impact on rental costs as a result of the supply issue, but based on the data, that is not happening now. The City also requires a business license for STRs which provides a tracking method. With regard to incentives, Ms. Haas recalled discussion two weeks ago about incentives such as preapproved units, conversions and massing. With regard to preapproved design, the incentive is a shorter permit time and lower cost for the developer. State law requires allowing the use of existing structures as conversions which is an incentive due to the potential use of a nonconforming structure and reducing construction costs by converting an existing structure. Massing incentives are related to size and height. She reviewed: • Staff recommendations o Adopt Code amendments in Council packet o Comply with HB 1337 prior to June 30, 2025 deadline o Allow 10-foot setback for all DADUs in RS-6, RS-8 zones o Provide 5-foot setback incentive for reduced DADU heights in the RS-6 and RS-8 zones o Allow ADUs up to 1200 sf in RS-10, RS-12 and RS-20 zones o No additional parking requirements o Require impact fees Council President Olson expressed appreciation for staff s presentation addressing issues that have arisen. She recalled an email from staff today indicating that some small issues were incorporated and the latest version of the code was Version 12; Version 11 was included in the council packet. Ms. Haas advised based on an inquiry from Council President Olson, the code revisions were updated to Version 12 which will be available to council if adoption is planned next week. That revision removed the concept and term "guest house" from the code which in her opinion was almost identical to an ADU. Guest houses were included in the code prior to the ADU code and allowed on RS-20 lots. She provided the definition of guesthouse in 21.35.030. "A guest house is a detached structure with not more than two bedrooms, accessory to a single family dwelling, having no kitchen facilities, used primarily for sleeping quarters, not occupied by paying tenants, and located on a lot of at least 20,000 square feet in area." In terms of this update, a guesthouse is an ADU except it does not have a kitchen facility. If DADUs are allowed, guest houses do not need to be included in the code, especially since they also require a conditional use permit (CUP) under 16.20 which was also removed. Guest house was also removed from the table of permit types as Type IIA which is a CUP. Those are the three instances in the code where guest house appears. MAIN MOTION #1 COUNCIL PRESIDENT OLSON MOVED THE ORDINANCE IN THE PACKET RELATING TO ACCESSORY DWELLING UNITS, AMENDING THE CODE AS REFLECTED IN VERSION #12 AND PLACING IT ON A FUTURE CONSENT AGENDA. Councilmember Paine raised a point of order, advising the council does not have Version 12 in front of them. Council President Olson pointed out Ms. Haas just shared the revisions and Version 12 will be on the consent agenda so councilmembers could verify the changes she reviewed. Mayor Rosen ruled it was appropriate to proceed with the motion. Edmonds City Council Approved Minutes June 4, 2024 Page 8 ACTION ON MAIN MOTION #1 MOTION DIED FOR LACK OF A SECOND. Councilmember Paine relayed her appreciation for staff researching STRs and providing a remarkable amount of information. STRs exist in Edmonds and at some point the council may want to consider regulations. She expressed appreciation for the work done by the planning & development department and by the planning board which took thousands of hours to collect. She liked the recommendations from staff and from the planning board, particularly the planning board's recommendation that allowed zero setback adjacent to an alley. She was interested in hearing her colleague comments, remarking she was surprised to receive an email this afternoon knowing there were two City meetings, the waterfront presentation and the special council meeting. She did not have an issue with Version 12 but wanted an opportunity to look at it. Councilmember Paine commented allowing a 1,200 square foot ADU on larger lots, instead of 1,000 square feet, will allow more than one bedroom or a little more space for a small family. For the most part in communities like Edmonds, it will be families sharing lots to reduce expense or help out a family member. Councilmember Nand asked if Version 12 could be provided if council took a five minute recess. Ms. McLaughlin advised it could be emailed to council during a recess. City Attorney Jeff Taraday said it is a regular meeting so in the same way council could amend the ordinance tonight, if staff provided Version 12 on the screen or via email, it would not legally be a problem. Ms. McLaughlin advised it was available digitally and could be displayed on the screen. Mayor Rosen declared a 5 minute recess. Ms. Haas displayed and reviewed the revised language: • 16.20.010.D.2 Secondary uses requiring a CUP, delete guest house • 21.35.030 Guest house, definition of guest house deleted • Guest house removed from permit table as requiring a Type II -A permit MAIN MOTION #2 COUNCILMEMBER DOTSCH MOVED TO DIRECT STAFF TO PREPARE AND BRING BACK FOR COUNCIL CONSIDERATION AND POTENTIAL ACTION ONLY THE COMPLIANCE REQUIREMENTS OF HB 1337 FOR THE UPDATED ADU POLICY AND CODE UPDATE AS OUTLINED IN THE SIGNED STATE BILL WITHOUT ANY CHANGES. ACTION ON MAIN MOTION #2 MOTION DIED FOR LACK OF A SECOND. MAIN MOTION #3 COUNCIL PRESIDENT OLSON MOVED, SECONDED BY COUNCILMEMBER NAND, TO APPROVE THE ORDINANCE IN THE PACKET RELATING TO ACCESSORY DWELLING UNITS, AMENDING THE CODE AS REFLECTED IN VERSION 12, AND PLACING IT ON A FUTURE CONSENT AGENDA FOR REVIEW. Council President Olson commented there is a lot of great content in the ordinance including some areas she was comfortable making changes to the state mandate. She personally felt the state mandate went further in some areas than she wished and shared another councilmember's opinion that were areas where she preferred not to proceed as recommended and will pose several amendments. AMENDMENT #1 COUNCIL PRESIDENT OLSON MOVED, SECONDED BY COUNCILMEMBER DOTSCH, TO AMEND THE MAX SIZE IN RS-10 AND RS-12 FROM 1,200 TO 1,000 WHICH IS THE STATE Edmonds City Council Approved Minutes June 4, 2024 Page 9 MANDATE, LEAVING 1,200 SQUARE FEET AS THE RECOMMENDED SIZE IN THE RS-20 ZONE ONLY. Council President Olson commented the right size ADU on many lots was 800 square feet and that was the discussion by the housing commission. There are some extraordinary large lots where one or two larger DADUs would not intrude on the neighbors. Two 1,200 square foot DADUs would require a large lot for them to fit and compliment the neighborhood. She was okay with allowing 1,200 square feet on RS-20 lots and she hoped council would support bringing the max size down to the state mandated 1,000 square feet on all other lots in Edmonds. Councilmember Nand commented while she appreciated Council President Olson and Councilmember Dotsch's concerns, she knew people who had been personally impacted by a decision to give up their independent single family dwelling and move into a mother-in-law or other construction. Anecdotally, the person she talked to was happy to sell her home and move in with her son and daughter-in-law because they were building what she described as a place for a queen. Limiting the size of an ADU to less than 1,200 square feet is not something the council should impose. If someone wants to build a 1,200 square foot ADU to accommodate an elderly, vulnerable, or disabled family member, they may need extra space for accessibility and other issues and she preferred to give them that flexibility. She did not envision the difference between 1,000 and 1,200 square feet would be that significant to the neighborhood. She did not support the amendment. Councilmember Tibbott relayed his understanding the 35% coverage limit will still apply. If the principal house was small such as 800 square feet, there may be plenty of room on the lot for a 1,200 square foot ADU. He wanted to incentivize retaining trees which was not on the list of potential incentives. For example, if someone wanted to build a 1,200 square foot ADU that require removing trees, he might prefer limiting it to 1000 square feet. At this point he will support the planning board's recommendation, but would like to consider incentives for keeping trees. Councilmember Chen agreed due to the 35% lot coverage requirement, he will support staff's recommendation. Councilmember Paine said she did not support the amendment. As she stated earlier, larger ADUs will accommodate small families who could benefit from having more elbow room. Councilmember Eck said overwhelming the comments in the packet and feedback she has gotten are supportive of state law and the requirements related to ADUs and DADUs are related to an aging or vulnerable family member, or disabled adult child. If that is the main purpose, she did not anticipate a lot of ADUs being built in Edmonds other than to accommodate those scenarios. Taking 200 square feet away does not make sense if the goal is to have the ADU be a livable unit for a family member. She did not support the amendment. Council President Olson commented ADUs are not intended to answer all the housing needs in the City. She has heard the same thing, they are most often for an aging parent or young adult not able to live on their own. She knows a friend with an adorable 400 square foot unit and if it were twice that size, 800 square feet, it would be a very livable space. A 1,000 square foot ADU would provide a nice living space; most apartments are 1,000 square feet and she did not think ADUs needed to be bigger. As one is driving down the street or walking down the sidewalk, bigger units will be more imposing on the look and feel of the neighborhood. She urged the council to support this amendment so ADUs are a maximum of 1,000 square feet, the state's mandate, except on the biggest lots. Councilmember Dotsch expressed support for the amendment. She pointed out 2 bedroom apartments average 800-1000 square feet. ADUs are accessory dwelling units, not the main dwelling unit and 800- Edmonds City Council Approved Minutes June 4, 2024 Page 10 1000 square foot units are comfortably built in other cities. She reminded this is heated space; unheated space such as decks and garages are in addition. The 1,000 square feet was a compromise for communities like Edmonds that have a lot of environmental impacts. ACTION ON AMENDMENT #1 AMENDMENT FAILED (3-4), COUNCIL PRESIDENT OLSON AND COUNCILMEMBERS DOTSCH AND TIBBOTT VOTING YES. AMENDMENT #2 COUNCIL PRESIDENT OLSON MOVED, SECONDED BY COUNCILMEMBER DOTSCH, TO AMEND RS-6 AND RS-8 ZONES TO THE ORIGINAL 15 FOOT SETBACK AND DELETE THE ASSOCIATED NOTE 3. Council President Olson commented setbacks are one of the most important things in the community; people even consider setbacks when purchasing their homes. For example, she lives in a property where there was a nonconforming situation and a unit was built on the property line. The unit was not built 5' from the property line and because the chimney and roof are allowed to overhang into the setback, they overhang into their property. Her house is setback 15', but that feels close in that area. Reducing the setbacks will change the quality of life for neighbors. The council owes it to the community to look out for them and their quality of life. ADU should be allowed on lots that are big enough to accommodate an ADU, but they shouldn't be an entitlement and shouldn't be a bigger imposition for the neighbor than it is for the person benefiting from having the ADU. Waiving the setbacks sets up a situation where the neighbors suffers more consequence from the ADU than the person building, renting or having a family member live in it. She summarized her interest in protecting the setbacks in the code. Council President Olson advised the setbacks are in Section 16.20.050.C. Ms. Haas explained staff s recommendation is a 5' setback incentive for 1-story units in RS-6 and RS-8 zones and all other units (2 story) would have an automatic 10' setback rather than the 15' setback required for single family residences. The planning board's recommendation was 5' setbacks in all zones if height was limited to 15'. Staff recommendation is just within the RS-6 and RS-8 zones. Ms. McLaughlin advised different zones have different setbacks. Ms. Haas relayed the setback in RS-6 and RS-8 for single family is 15% staffs recommendation is a DADU with 2 stories be require to have a 10' setback, which decreases the setback by 5' and if the ADU/DADU had a 15' height, a 5' setback would be allowed. No change is recommended for RS-20, RS-12 and RS-10 zones, the setback would be the same as single family homes. Council President Olson clarified her proposal was for the rear setback for RS-6 and RS-8 to be 15'and to delete Note 3 which makes it a caveat for doing something different. In her personal experience, 5' is not adequate. Ms. Haas asked for clarification whether both 1-story and 2-story ADU/DADU would have a 15' setback. Council President Olson agreed. Ms. McLaughlin asked if Council President Olson's property was in an RS-6 or RS-8 zone. Council President Olson said she only used her property as an example where she saw the 5' setback implemented and knows it doesn't work. Councilmember Paine asked if lots in RS-6 and RS-8 were perfectly square and how setbacks were measured if the lots did not have 90 degree angles. She asked about properties that abut an alley, recalling the planning board discussed DADU that abut an alley; some of the downtown streets have alleys. Ms. Haas answered RS-6 zoned lots are mostly in the Edmonds bowl and developed based on a grid pattern in the 1890s and are typically square a most have alleys. Many of the RS-6 lots by state law will be able to abut alley, but engineering and building codes, utility lines, etc. that may not always be possible and may force a setback. Councilmember Paine asked if utilities are located in alleys. Ms. McLaughlin answered they are considered street right-of-way where public utilities may be located. Ms. Haas explained lots in the RS-8 zone are not Edmonds City Council Approved Minutes June 4, 2024 Page 11 always square. A flag lot which has less than half the width required by code, has all side setbacks for all structures which is 5' in RS-6, 7.5' in RS-8, 10 feet in RS-10 and RS-12, and 10'-25' in RS-20. Councilmember Paine relayed her understanding that flag lots have a mixture of setbacks and increasing setbacks to 15' would expanding those setback. Ms. Haas answered a flag lot only has side setbacks, no rear setback. The side setback would apply to an ADU or other accessory structure such as a garage or playhouse. Councilmember Paine said that is not in the table in Version 11. Ms. Haas agreed, explaining that is a supplement to the development table which is not changing. She reiterated a rear setback does not apply in flag lots. Councilmember Nand expressed support for the incentive recommended by staff and the planning board for smaller lots. When looking at impacts to neighbors and neighborhoods, she assumed there would be an incentive on smaller lots to build up to maximize square footage. She envisioned a 24' 2-story unit would be a bigger impact to a neighborhood compared to a 15' 1-story unit that has a 5' setback. She recalled when a neighbor built a greenhouse and blocked the view of the lake from her bedroom, she was very sad. Had seen been asked, she would have asked them not to block her view of the lake. With water views in Edmonds, particularly since RS-6 and RS-8 zones tend to be in the bowl, there would be more sensitivity to height than to the width of the setback. She summarized this is an elegant solution and supports the planning board and staff s recommendation and does not support the amendment. Councilmember Dotsch expressed support for the amendment, agreeing with Council President Olson that the impact on reduced setbacks was on the neighbors not the developer. She cited tree canopy loss, view loss, light loss, and increased shadows of 24' buildings closer than 15' to a neighbor. She pointed out a building could be taller than 24' on a slope, making the setback even more important. She recalled the bill was sold to the public that all setbacks would be the same as single family so it would not be noticeable in the neighborhood and would blend in. An ADU/DADU with a 5' setback does not blend in and impacts the value and enjoyment of the neighboring lots. She expressed support for this very Edmonds -type amendment. ACTION ON AMENDMENT #2 AMENDMENT FAILED (3-4), COUNCIL PRESIDENT OLSON, AND COUNCILMEMBERS DOTSCH AND TIBBOTT VOTING YES. AMENDMENT #3 COUNCIL PRESIDENT OLSON MOVED, SECONDED BY COUNCILMEMBER TIBBOTT , TO AMEND 16.20.050.A SITE DEVELOPMENT STANDARDS GENERAL, ADD A SENTENCE, "DADUS ARE PROHIBITED IN CRITICAL AQUIFER RECHARGE AREAS WITH A SUNSET DATE OF JUNE 30, 2025. Council President Olson explained the City has the option of not implementing the DADU code until 6 months after the deadline for the comprehensive plan update. A few weeks ago there was extensive research and debate regarding the critical aquifer recharge areas (CARA) and their sensitivity to development. In her assessment, the City does not have the science that injection wells that go along with new development are a dangerous to the water source, but Ecology and the federal government are actively working on that science. Providing extra time so people do not have an additional reason to develop in the CARAs would be prudent and the City has the legal right to do that because the DADU code does not have to be implemented until 6 months after the deadline for the comprehensive plan update. Councilmember Nand asked if this additional restriction would be in compliance with HB 1337. Mr. Taraday answered yes, because there is no state law the City has to comply with until 6 months after the comprehensive plan deadline. He was unsure if that date translated exactly to June 30, 2025, but that sounds about right. The City is proposing regulations related to DADUs early so is not technically bound by HB 1337 until approximately that date. Edmonds City Council Approved Minutes June 4, 2024 Page 12 Councilmember Nand relayed her understanding that there is extra sensitivity above the normal critical areas in CARAs, but when it comes to restricting DADUs or crumb rubber, she did not understand why the council was targeting those property owners rather than having a more citywide strategy. In her opinion, it was unfair to single out property owners in the CARAs. The CARA code will restrict things that impact the aquifer. She felt this amendment was out of left field and preferred this proposal go through a public process with the planning board, the city engineer, etc. before the council singles out and burdens property owners in CARAs as opposed to property owners in or adjacent to other critical areas in Edmonds. ACTION ON AMENDMENT #3 MOTION CARRIED (4-3), COUNCILMEMBERS PAINE, ECK AND NAND VOTING NO. AMENDMENT #4 COUNCIL PRESIDENT OLSON MOVED, SECONDED BY COUNCILMEMBER TIBBOTT„ TO AMEND THE REAR SETBACK IN 16.20.050 TO 15 FEET IN RS-6 AND RS-8 AND CHANGE NOTE 3 FROM 5-FEET TO 10-FEET FOR 15-FOOT BUILDING HEIGHT. Council President Olson assured from her personal experience a 5' setback which still has eaves that protrude 30" into the setback is too close and the council owes the residents more protection than that. Councilmember Paine asked for clarification regarding the revision to Note 3. She asked if the amendment was intended not to allow eaves to extend into the 5' setback. Council President Olson said she only used that to express why 5' wasn't adequate. Her amendment was to change 5' to 10' in Note 3 for a 15' building height. Note 3 would read: The normally required rear setback may be reduced to a minimum of 10' for a detached dwelling unit 15' in height or less. Councilmember Paine said she preferred the planning board and staff s recommendation. The amendment seemed to be taking bites at the same apple. Councilmember Tibbott expressed support for the motion. He has been in neighborhoods where houses were 5' apart, but they were planned developments where windows and doors did not line up. Edmonds is a highly developed city and he feared there could be significant issues with 5' setbacks. Councilmember Dotsch expressed support for the motion for the reasons she stated previously. She pointed out with a 15' setback, there could still be a window over a fence. She referenced people who spoke during the legislative bill process and in speaking with residents of Wallingford where many of the changes were incremental, one of the biggest was changing setbacks to 5' and the resulting loss of trees, privacy and light. She was curious whether 5' was safe in terms of fire, access, etc. Councilmember Chen asked with a 5' setback in RS-6 and RS-8, did homeowners have the option of building two stories and two units to maximize the 2,000 square feet. Ms. McLaughlin answered RS-6 and RS-8 are constrained in terms of lot size and development regulations including the 35% lot coverage. However, in theory if it were an unincumbered site, there could be a 10' setback and 24' height limit. Councilmember Chen asked if 5' for 15' building height would eliminate that possibility. Ms. McLauglin explained staff s recommendation was to reduce the setback to 5' in RS-6 and RS-8 for a single story building; a 2-story building would have to adhere to the 10' setback. Councilmember Chen explained his logical was if a homeowner needs an ADU and they were restricted to a 10' setback, although he understood the concerns with privacy, if that was their only choice, the 5' setback would allow them to construct an ADU. If a 10' setback is required, that ADU becomes infeasible. Ms. McLaughlin said that was why when staff did their analysis and shared various lot illustrations during previous presentations, staff looked at scenarios given 6,000 and 8,000 square foot lots to see how an ADU Edmonds City Council Approved Minutes June 4, 2024 Page 13 could fit considering the City's development standards which is why incentivizing a single story with 5' setback was a good option for smaller, constrained lots. Councilmember Chen thanked staff for reasoning that though with him. He concluded a 10' setback would kill the deal for RS-6 and RS-8 zones and for that reason he did not support the amendment. Councilmember Nand relayed she could not support the amendment due to her concern if too many restrictions are placed on ADUs, fewer units will be built. She lives in a townhouse and shares two common walls and knows when her neighbors wake up. ADUs provide an option to prevent people from being displaced from the community and to construct something that retains the original structure which sometimes is a vintage and very charming house. If a person wants to build an ADU to accommodate a family member or make their property more economically feasible so they can stay in Edmonds where they have invested financial and with their sweat equity, the council should try to incentivize that. Otherwise homeowners will sell to a developer who will put up a gigantic, obnoxious duplex with people sharing walls that will overhang and over -mass the neighbors much more than an ADU would. She was opposed to excessive restrictions on ADUs. The planning board, staff and the public went through a very rigorous process over many months to develop an elegant compromises that meet Edmonds' vision and tearing up their work without going through a public process would be a disservice. With regard to the public process, Councilmember Dotsch assured she read all the emails and public input and watched the meetings and a lot of this is not coming from the public. The council has heard from the public and knows what they want and the council represents the residents who are at the top of the City's org chart. One of the big issues is encroachment on other properties. She asked for confirmation that some things can encroach into the setback such as decks and patios. Ms. Haas advised eaves and chimneys can encroach in to the setback up to 30", a paved patio not used for access can encroach into the setback by 1/3 or 4' whichever is less. Councilmember Dotsch commented people need to understand how tight that is and how neighboring properties will be burdened by the lack of setbacks. This was sold to the public that it would mimic single family with same setbacks and would blend in. In talking to people in Seattle who are neighbors to ADUs, there is nothing blending about a 5' setback. Council President Olson pushed back on the comment that suggesting changes ignores the public process. She reads every email and all the public comments and has been engaged in this since the housing commission days in 2020, talking to oodles of people about ADUs, what they are and are not, and their potential. She is in favor of ADUs, finding them a great living option, but she is also in favor of protecting the quality of life for residents and knows a 5' setback does not get there. This is a compromise, getting to 10' instead of 5'. ADUs should be infeasible on some lots, lots where it is not conducive to have an ADU, and the City shouldn't try to make them work in places where they don't work. Councilmember Eck said most or even many homeowners will not build an ADU. The 35% lot coverage requirement will not change. The intent is to incentivize people not to build up, not block views, not look into second floor windows, etc. It is unlikely vulnerable adults or seniors like her mother-in-law who is 80 and might eventually move into an ADU will want a unit with stairs so single story ADUs are more likely. Someone with a wheelchair needs the maximum amount of space. She did not want to chip away at the work that was done over a long period of time by the planning board who are community members and the planning department. She did not support the amendment. Councilmember Paine commended Ms. Haas for knowing all the details, for her work at the counter and knowing things such as eaves are allowed to encroach 30". These are questions that will come up at the permit desk from the public. She echoed other councilmembers' comments that there has been an abundant process, a lot of emails and discussions for at least the past 4'/2 years. The council is implementing ADUs under the constraints of state law. She did not support the amendment for the reasons mentioned previously. ACTION ON AMENDMENT #4 Edmonds City Council Approved Minutes June 4, 2024 Page 14 AMENDMENT FAILED (3-4), COUNCIL PRESIDENT OLSON, COUNCILMEMBERS DOTSCH AND TIBBOTT VOTING YES. AMENDMENT #5 COUNCILMEMBER PAINE MOVED, SECONDED BY COUNCILMEMBER ECK, THAT THE DECISION COUNCIL MAKES TONIGHT DOES NOT GO TO A CONSENT AGENDA AND IS THE FINAL DECISION. Councilmember Paine commented this issue has been heard repeatedly. Making the decision tonight will not cause harm. She did not support moving decisions to the consent agenda which results in an interminable circle and preferred to make decisions at the meeting where the item was discussed. She preferred to make this decision tonight in view of the abundant discussion. Councilmember Dotsch did not support the amendment, pointing out the ADU discussion at the housing commission was entirely different than what is being discussed now. The council and the public should be able to see the code in its entirety with the amendments made on the fly today. Council President Olson commented this has been years in the process, the City is not against a deadline, and placing it on the consent agenda is only a week's delay. With the changes that were made, unless a councilmember was concerned they would hear things from the public that did not align with how they voted, it should not be an issue to approve the ordinance on the consent agenda. She was definitely opposed to this amendment and preferred it be forwarded to the consent agenda. Councilmember Nand opined it would be appropriate to forward Version 12 to the consent agenda so the final version is reprinted as the council understands it and if there are any transcription errors, the public and council have an opportunity for review. She hoped it could be forwarded to the next consent agenda, recalling a public comment last week where a gentleman said he was building a nonconforming ADU because he was not going to wait. She understood the eagerness to adopt the code as soon as possible, but did not feel waiting one week to have the final, amended version available would be too burdensome. Councilmember Chen did not support the amendment and making rush decisions. He was a member of the housing commission so this issue had been discussed for four years. He appreciated the work of the planning board and the public, agreeing there was no reason to rush. The amendments need to be incorporated into the code and he preferred to have the entire package on the consent agenda. Councilmember Eck commented ultimately visibility and ensuring the packet has accurate information has value. However, the council seems to be getting into a cycle where things come back in pieces and at some point she hoped the council did not always move items to the consent agenda the following week. When the council can move swiftly and it makes sense, she would like the council to do so. ACTION ON AMENDMENT #5 AMENDMENT FAILED (2-5), COUNCILMEMBERS PAINE AND ECK, VOTING YES. AMENDMENT #6 A MOTION WAS MADE BY COUNCILMEMBER DOTSCH AND SECONDED TO AMEND 16.20.050.0 THE TABLE OF SUBDISTRICTS, UNDER MINIMUM PARKING CHANGE THE ZEROS TO 1. Councilmember Dotsch recalled in the feedback she read and listened to, parking was a big issue for almost everyone and only a limited number of people do not want parking for ADUs. With the size of ADUs and disabled persons who need transit or have their own transportation, parking will be important. As Edmonds has annexed some semi -rural areas, parking is non-existent in some areas and very dangerous in other areas which affects the public's safety. In Seattle where parking was not required, the neighbors are very affected Edmonds City Council Approved Minutes June 4, 2024 Page 15 by the lack of parking. Edmonds also has very narrow cul-de-sacs, a lot of old housing with only one car garages, and limited transit options so the majority of people will have a car making it reasonable to require parking for an ADU. She summarized this coincides with the public's concerns about not mimicking what Seattle has done related to parking. Councilmember Paine did not support the motion, primarily due to the burden of cost to the parcel building the DADU. As someone who worked on subdivisions in Seattle for 7-8 years, it was townhomes that pushed cars onto the street due to narrow garages that were often used for storage. Overregulation such as requiring additional parking creates an additional burden and reduces options for property owners. Council President Olson thanked Councilmember Dotsch for bringing up the parking issue. The planning board's recommendation to require one parking space for a second DADU was not incorporated into the ordinance that was recommended by staff. She was comfortable with not requiring parking for one ADU, but wanted to implement the planning board's recommendation for a second ADU. She will vote no on this amendment although she appreciated that it reminded her to make another amendment related to parking if this one does not pass. Councilmember Nand observed a property with a single family dwelling unit was already mandated to have two off-street parking spaces. She appreciated Councilmember Dotsch's concern about parking, and was very concerned about proposals from the state legislature about building tall apartment buildings without adequate parking because she sees the strain caused by the lack of adequate parking due to high density housing in her neighborhood and on Highway 99. However, if there is just one additional ADU on a property that already has two -street parking spaces and people are spending over $200,000 to build an ADU primarily for an elderly family member who may have already stopped driving or will not be bringing an additional vehicle to the property, she was comfortable with not requiring an additional parking space for one ADU. She would support the planning board's recommendation for an additional parking space for a second ADU as a second unit would be more likely to be used for workforce housing and the occupant would be more likely to have a vehicle. ACTION ON AMENDMENT #6 AMENDMENT FAILED (1-6), COUNCILMEMBER DOTSCH VOTING YES. AMENDMENT #7 COUNCIL PRESIDENT OLSON MOVED, SECONDED BY COUNCILMEMBER TIBBOTT, TO HAVE STAFF BRING BACK LANGUAGE IMPLEMENTING THE PLANNING BOARD'S RECOMMENDATION REGARDING PARKING WHEN IT COMES BACK ON CONSENT. Council President Olson anticipated staff would have a better idea where to put that language in the code and how to say it and suggested staff send council the language via email in advance. Ms. Haas expressed concern if council had concerns with the language and it had to be amended again and placed on the following week's consent agenda, that could result in a never-ending cycle. Council President Olson said her intent would be for staff to add the language to the code that will be on consent next week. If staff had recommended language tonight, she could amend the amendment to incorporate that language. Ms. McLaughlin commented council had already indicated their preference to have the code on consent rather than adopting it tonight. Staff would obviously prefer adoption tonight to minimize staff resources and time and because council can review the amendments in real time on the screen. However, that does not appear to be council's preferred option so it can be scheduled on consent with this edit related to the planning board's recommendation regarding parking. Councilmember Nand spoke against the amendment, preferring to adopt the omnibus ADU bill and if individual councilmembers want to make further tweaks such as adding entire sections, they should be Edmonds City Council Approved Minutes June 4, 2024 Page 16 brought forward as separate agenda items instead of making such a massive change via an amendment on consent on such a high profile matter. She assumed further tweaks to the ADU code would be necessary as property owners try to build them and request amendments. If a councilmember feels passionate that not enough parking is provided for properties with two ADUs, it can be considered in a future legislative cycle and the council can pass this omnibus ADU bill just to get something on the books because nonconforming ADUs are already being built in Edmonds and she was concerned that the more the council tortures this body of legislation, the more it delays the overall adoption. Councilmember Tibbott expressed support for amendment even though it is somewhat ambiguous regarding how it would be incorporate into the code. As a councilmember stated previously, there may be a good argument for not requiring additional parking for one ADU, but a second ADU may infringe on the parking provided. His concern with ADUs in general and with regard to parking is people tend to build ADUs and then they move and the original reason for the building the ADU is gone and parking may be needed for the new use of the ADU. He found it completely reasonable to require parking for a second ADU. Councilmember Eck recalled there was an amendment about adding parking that was not approved and now this amendment is requesting approval of language the council hasn't seen or approved. She asked how this would look if it goes to consent. Council President Olson advised any councilmember can pull an item from consent if a change needs to be made. She reiterated her request for staff to provide proposed language via email so councilmembers could raise any issues with staff ahead of the council meeting. This amendment is not the same as the previous; this amendment is related to parking for a second ADU, the planning board's recommendation that was not incorporated in Version 12. The amendment, if approved, requests staff include the revision in the code when it is on consent. Councilmember Eck agreed this amendment was different than Councilmember Dotsch's amendment. She understood this was the planning board's recommendation, but staff had a different recommendation. Ms. McLaughlin clarified staff is not recommending regulating parking for ADUs, whether one or two ADUs; the planning board wanted to regulate parking for a second ADU by requiring one parking space. The easy change would be to update the table by adding a footnote to state one parking space would be required for a second ADU on a parcel. That policy decision and amendment is up to council. Staff would prefer the code be approved on the consent agenda without being pulled and added to the agenda for further discussion. Ms. Haas said she was not comfortable changing the code to include the planning board's recommendation prior to a vote of the council. Councilmember Eck expressed concern if the code was moved to consent, the council has to approve all of it or none of it. Ms. McLaughlin commented if the council voted on all the other amendments, why was the council not voting on this amendment. Council President Olson clarified the council will vote on the amendment to add the planning board's recommendation regarding parking. Staff has described how that amendment would be implemented, via the addition of a footnote to require one parking space for a second ADU. Ms. Haas advised that would be Note 4 in 16.20.050. Councilmember Chen expressed support for the planning board's recommendation to require a parking space for a second ADU. One ADU will most likely be for family members. When someone builds a second ADU, state law allows the ADUs to be sold separately so there is a commercial component. He supported the need for a parking space for a second ADU. Councilmember Dotsch expressed support for the amendment, pointing out ADUs are also for middle housing. She asked if someone built a townhouse on a lot, could they also build an ADU. Ms. McLaughlin Edmonds City Council Approved Minutes June 4, 2024 Page 17 answered it depends, per HB 1220, ADUs are not middle housing. Per housing typology, they could be described as middle housing. Councilmember Dotsch asked if someone built a duplex on a lot, could they add an ADU. Ms. McLaughlin answered yes, in accordance with HB 1110 and HB 1337. Councilmember Dotsch commented duplexes are middle housing and middle housing is only required to have one parking space. She wanted to ensure everyone understood that ADUs could be added to middle housing development. Ms. McLaughlin advised the City has not adopted middle housing standards yet. Councilmember Dotsch advised the state requirement was one parking space. Ms. Haas said property owners are not restricted from providing additional parking spaces; they can have as much parking as stormwater regulations allow. A parking space is just not required. AMENDMENT TO AMENDMENT #7 COUNCILMEMBER PAINE MOVED, SECONDED BY COUNCIL PRESIDENT OLSON, TO AMEND THE AMENDMENT TO HAVE THE LANGUAGE IN FOOTNOTE 4 TO REQUIRE ONE PARKING SPACE FOR THE SECOND ADU. Councilmember Paine said adding this tonight will cut through some dialogue instead of waiting for next week. Councilmember Nand said she was not comfortable voting on language she has not seen and did not think this was procedurally the appropriate way to direct staff to draft language. This should be brought forward as a separate agenda item; this is procedurally very difficult for council and the public. This issue should be excluded from consideration tonight and she will not support the amendment to the amendment or the amendment. If individual councilmembers wish to bring this language forward, she preferred they work with staff to draft language that would be included in the council packet so councilmembers could see what they were voting on. Council President Olson explained the intent of the amendment to the amendment was to remedy Councilmember Nand's concern; if the amendment is approved, the wording will be one parking space shall be required for a second ADU. ACTION ON AMENDMENT TO AMENDMENT #7 AMENDMENT CARRIED (6-1), COUNCILMEMBER NAND VOTING NO. ACTION ON AMENDMENT #7 AMENDMENT CARRIED (6-1), COUNCILMEMBER NAND VOTING NO. ACTION ON MAIN MOTION #3 MOTION AS AMENDED CARRIED UNANIMOUSLY. 2. LANDMARK 99- FINANCING OPTIONS/DEVELOPER NEGOTIATIONS Planning & Development Director Susan McLaughlin introduced Community, Culture & Economic Development Director Todd Tatum and Marc Greenough, Foster Garvey, the City's bond counsel, explaining Mr. Greenough will walk through financing strategies and information to inform the next steps on the Landmark 99 potential partnership. Staff has been advancing on conversations with the potential development partner in keeping with the last update to council. As staff has been discussing options with Mr. Greenough, it was critical to bring council into discussions about potential financing strategies which will inform the tools that are brought to the table in the partnership discussions. Edmonds City Council Approved Minutes June 4, 2024 Page 18 Mr. Greenough explained he was called in to help on this property acquisition regarding how best to finance it and how to structure a public -private venture to create the best product that reduces the risk of those who can't afford it the most and places risks on people best able to mitigate them. Status of project o Property is under contract ■ City signed a Purchase & Sale Agreement with option to purchase o $1MM earnest money due 3/1/2025 o Closing by 9/30/2025 • Risk and rewards o Risks ■ Interest rates ■ Construction costs ■ Entitlements o Rewards ■ Potential grants and loans for housing ■ Demand for housing ■ Support for redevelopment Property acquisition strategies o Two parcels ■ Originally envisioned at closing the City would pay for its portion (1/4) and developer provide cash for its portion (3/4) ■ Considering a way for City to bear weight of financing the property longer due to the City's better credit rating and more access to capital. Developer will be affected by interest rates and delays which will add to the cost of the project. ■ Strategies - Condominium (City purchase entire property with intent to declare condominium after entitlements in place) - Single parcel (w/ or w/o ground lease) - Multiple parcels - Community renewal authority Entitlement process o Design o Community outreach o Master use permit intake o Building permit intake o Street improvement process o Construction documents o Master use permit approval o Architectural specifications o Building permit issued o Photo of things come up during entitlement process ■ Examples: sinkhole, underground artifacts, keyhole property, etc. Disposition alternatives o None o Condominium o Subdivide o Ground lease (all at once or as completed) Financing strategies o Construction loan/permanent loan o Capitalized interest o Prepayments o Ground lease (all at once or as completed, level or backloaded, fixed or variable) Edmonds City Council Approved Minutes June 4, 2024 Page 19 Scott Bauer, NW Municipal Advisors, was present to answer questions. COUNCILMEMBER PAINE MOVED, SECONDED BY COUNCIL PRESIDENT OLSON, TO EXTEND TO 10:30. MOTION CARRIED (6-1), COUNCILMEMBER TIBBOTT VOTING NO. Councilmember Paine said risk and rewards will be one of the key things for council to consider. She asked about his experience working with projects of comparable size. Mr. Greenough answered the first similar project he worked on was the Pacific Place Parking Garage over 30 years ago. This is an area he has worked on with various municipalities and private developers. The most recent was the development of workforce housing in the Georgetown area of Seattle where a nonprofit developer brought in tax-exempt financing, kept half the property for themselves, and ground leased several parcels to community entities to develop workforce housing as they did the entitlements themselves. Councilmember Paine asked if City decides to move forward, which of the options provides the City the greatest flexibility for disposition, whether it is ground lease or subdividing. She recognized that may also depend on who the partners are. She asked him to speak to the disposition alternatives. Mr. Greenough answered this will not be a unilateral decision that the City makes. When they met with the developer, he had a good idea of what they be most interested in. When the concept of the City purchasing all the land upfront was proposed, the developer said that's a gamechanger because it removes so much of the cost and risk they would otherwise have trying to find financing as they do not have a thick balance sheet and are a cash poor developer and getting banks to lend a significant amount in today's environment, without knowing the constructing costs and purchasing unentitled land makes it very risky and difficult for them. Mr. Greenough continued, if the City is comfortable and knows it wants to control this property regardless of whether there are storm seas ahead that the developer faces or entitlement issues, new conditions found on the property, community opposition to what is proposed, etc., if the City is willing take on that risk, it will have a lot more control and be able to bring in a project at a much lower rate. That is the biggest risk/reward tradeoff the City faces. The City has a good partner that can attract interest in building this type of a project, workforce housing at a transit hub, which will generate a lot of interest. If the City provides funding, the likelihood of attracting other funding partners and achieving this project goes up significantly. Council President Olson said she submitted this question via email yesterday. If the council wanted to modify the approach and instead of workforce housing on the entire project, do workforce housing on 20- 33% of it, how does that impact possibilities and financing options and do the opportunities to support the project go away or is that enough to still be attractive. Mr. Greenough clarified Council President Olson's question, the City's portion, the civic center portion wouldn't change but the mix of housing becomes less workforce housing and more market rate housing. Council President Olson agreed that was her question. Mr. Greenough explained market rate housing brings in more rents if they are not subsidized, but it attracts fewer subsidies. He was sure the developer could provide development proposals showing different mixes of market and workforce housing. Council President Olson asked if the developer would still be interested if the City does not have the money to invest in the community portion of the development. Mr. Greenough answered most developers he has worked with, although he could not speak for this developer because he hasn't worked with them, are happy to have a civic center next door, but whether it's a civic center, other housing or even grass for a long time, that is probably not a big driver of their interest in moving forward with their portion of the project. Staff may have had other conversations with the developer, but his guess would be the developer was not driven principally by the ability to co -locate with the civic uses. He expected the developer would view the civic uses as amenities but not as gamechangers. Edmonds City Council Approved Minutes June 4, 2024 Page 20 Ms. McLaughlin explained staff is early in their conversations with this potential partner; in those early conversations and during the interview process., the civic component was critical to what they believed as building community, particularly for workforce and affordable housing over a 55 year period, thinking about that as a stable use and one that would provide an amenity for the community as a whole. She acknowledged what Mr. Greenough said could also true, once conversations regarding potential composition and what the City is able/unable to bring to the table, that may change their perspective and there could be a comparable to that civic component. Mr. Greenough said he did not mean to be glib, the developer responded to the RFP because they are interested in the project, want to work with the City and value the City's vision for its parcel. If the City isn't able to develop its portion, he was unsure that would change the developer's approach or the economics, but his hunch was it wouldn't change significantly. Likely the developer views it as an amenity, but it was unlikely to change the spreadsheets they are developing to determine how much each door will cost. Councilmember Tibbott relayed he could see the advantage to the developer for the City to take on the whole purchase price and the potential for a lower cost mortgage. There are leases on the property so the holding period is fairly significant, 3-3.5 years. He asked the risk of holding onto the property for that amount of time and the cost to the City of holding it. Mr. Greenough answered he hasn't seen the developer's proposed development schedule; there are a lot of ways of dealing with a tenant including buying them out. There is a lot to be done before any tenant on the property would be asked to leave. As long as the City has the ability to conduct due diligence; environmental and archeological consulting firms can do that with buildings in place. He suggested that would be a good question to ask the developer, how best to handle the tenant on site. Councilmember Tibbott relayed his understanding that the City would pay the holding cost if the preferred developer option were pursued. Mr. Greenough answered the developer hasn't developed a preferred option; the first time they heard the City might do something other than ask them to pay for their parcel in cash next September was the meeting he and staff had with them and opened their eyes to thinking there may be a different way of working things out. The City hasn't promised the developer anything and this was not a request made by the developer. Councilmember Tibbott said a secondary risk to consider is all the housing being planned and developed in the Shoreline area as well as around the transit hub in Lynnwood; thousands of housing units are planned in the area in next few years. He asked to what extent that was a risk. Mr. Greenough agreed it was a risk, but was not something he was qualified to address. With regard to holding the property for the lease period, that will be an issue regardless of who finances the property. If it is the developer, their cost to hold that will be significantly higher than the City's cost. Is there is a way the City can carry that cost at a lower rate in exchange for getting back from the developer increased ground rent than they otherwise would get after the building is up and running, the developer is cash flowing and bringing in rents, and is able pay an above market ground rent to the City to make up for the risk the City took on in carrying the property during the entitlement and construction period. The intent is not that the City subsidize this; the intent would be to figure out who can control risk and who can take on the risk more adequately. Mr. Tatum commented managing that risk is a key point; managing that risk in this way adds more to the project. To the question of what the City brings to the project, the City has the ability to manage lower interest rate risk in particular over time which brings something to the project. That is a valuable tool to consider in this process. Councilmember Eck observed there are more grants and funding opportunities than ever with the focus on housing. With regard to his remark about grants and funding opportunities, she asked if there was a particular average median income (AMI) that would be more attractive to grantors and funders. Mr. Greenough answered he has colleagues who work in the low income sector and could answer that; he Edmonds City Council Approved Minutes June 4, 2024 Page 21 suggested bringing them in for an encore session. He also understood the developer the City is in conversation with could likely answer that question. It is entirely reasonable to ask the developer to develop a couple alternatives with regard to the mix of housing that could go on that parcel and what might be most advantageous. Councilmember Eck was glad to hear him mention workforce housing and asked what AMI he envisioned. Mr. Greenough recalled what was financed in Georgetown was 60-80% AMI; it was for artisans who want to stay in studios creating art and other middle income, but not low income public housing. Mr. Tatum commented there is a group that is not part of this discussion, the group that respond to the RFP. Gracorp is one of the partners and they have extensive experience in developing many types of housing. They have the tools to determine the cost per door, characteristics of the housing, AMI, rents, etc. He recalled their aim for this housing was for 30-80% AMI. Councilmember Chen commented it was very interesting to learn about the risk and rewards. When meeting with J2 along with the staff team, he was under the impression J2 has the advantages of access to grants and loans for low income housing. Tonight's presentation is a twist, looking at the City carrying the cost of acquiring the land and using the City's low interest as a strategy. That was a big change for him, but he was glad to hear about different options. He asked whether J2 had a successful history of acquiring grants. Mr. Greenough said staff knows J2 better than he does. He assured it was not J2's idea that the City purchase the property; that was an idea that was worked on internally and was just recently introduced to J2. It was not introduced because J2 said they couldn't get financing, it had been his experience over many decades of these type of projects that public financing is the least expensive, especially compared to developer financing. He works in the public financing sector, but does not push projects; the policy decision for how to proceed with this project is completely up to the council, he is just here to provide legal advice and assistance depending on how the council decides to structure it. Ms. McLaughlin explained bringing this conversation forward with the transparency that this was not led by the developer and decisions have not been made. These are questions that came to staff s mind that they have a hard time answering; what is the City bringing to the table, what are the options, how to lower the City's risk, how to maximize the outcomes in alignment with the community vision, etc. Those are some of the things the internal team has been discussing and Mr. Greenough supporting that conversation with these plot twists. Mr. Tatum said hearing options about how to deal with carrying costs, interest over time, ground lease, market rate ground lease, etc., the staff team thought it would be a good opportunity to have that discussion with council and for the public to hear about it. Councilmember Chen said he was open to discussion, but his first reaction was it actually increases the City's risk instead of decreasing it. He recalled during Mr. Greenough's presentation, he mentioned the City will need to come up with $1 OM for the City's portion of the land acquisition. If the City is responsible for developing the civic center, that may cost another $15-16M so a total of $25M plus carrying costs. Ms. McLaughlin responded those were hypotheticals in terms of trying to apply the concept to this particular size. Staff is not at the point of being able to come to council with financing options for this site with this particular developer. That is why it is critical to come to council now with options. Mr. Greenough explained that is why he tried to convey a complete ballpark number. He has not dug into the numbers for any of the various proposals. Mr. Tatum explained there are tools available such as impact fees and interest rates arbitrage for the City to get equity into the project in ways that are more creative. Councilmember Chen said he looked forward to the advantages J2 provides related to access to grants, recalling during the conversation with them, that was their strong point in this partnership. He looked forward to learning more from J2. Edmonds City Council Approved Minutes June 4, 2024 Page 22 Councilmember Paine assumed since the bond attorney was also present that staff was looking at bonding for the ultimate purchase and possibly some extra money. Similar to Councilmember Chen's comments, the repayment of whatever financial mechanism of whatever path the City goes down, she was particularly interested in condominiumization so some of the parcels can be sold off once they are developed. She asked if there were grants available to help pay for the land as well as developing housing. Mr. Greenough answered developers need to acquire land before they build projects so that will be a big part of the discussion when they are assembling their financing package. There will be a blend of loans, grants, ongoing subsidies, and equity that the developer has to put in to pull off such a development. Some of these housing projects have many, many different funders such as selling off low income housing tax credits to investors on the east coast, local government subsidies, some of them are very complex. Mr. Tatum relayed the federal government has a number of subsidized funding options for the purchase and construction of affordable housing. Ms. McLaughlin reiterated this was not something J2 said they could not do; this was an exploration of what it would make sense for the City to do in light of its financial situation, how to get what the City wants out of this deal, how the City makes a potential contribution such as maintaining or owning the public space, constructing the civic building, etc. Tonight's discussion is to help understand the City's strength in the bond process and the City's ability to borrow at lower interest rates. Councilmember Paine relayed her understanding there will be many avenues for funding streams, commenting it will be imperative to consider how those will come together with the aspects Mr. Greenough reviewed. The council will need to have that information in digestible chunks, in tables with footnotes, etc. She will appreciate getting a fuller answer on that. Councilmember Dotsch asked if staff knew the financial health of J2, whether the finance department has looked at a 3-year balance sheet or profit and loss statement. Mr. Tatum answered it is a partnership, not just J2, and that information has not been evaluated. When the City gets to a negotiation phase with them in earnest, understanding their financial health and whether they are able to bring dollars to table will be at the top of the list. They already have $5M in funding toward this project. COUNCILMEMBER DOTSCH MOVED TO POSTPONE INDEFINITELY FURTHER DISCUSSION OF THE LANDMARK 99 FINANCING OPTIONS AND DEVELOPER NEGOTIATIONS. MOTION DIED FOR LACK FOR SECOND. Councilmember Nand prefaced her comments by saying she thought Landmark 99 was a parcel the City could potentially be engaged with for a significant period of time. Due to the changed economic circumstances in the financial sector with interest rates and also the City's budgetary constraints, she asked if the City does not execute on March 1, 2025 on the full 10+ acres, is the City under any obligation with the developer with regard to attempting to bring forward this $37M purchase. Mr. Tatum answered no, the option expires if the City does not execute on March 31, 2025. Councilmember Nand recalled initially this project began by Director Feser inquiring about the two acres of open space behind the Burlington Coat Factory property. If the council adopted a strategy of attempting to acquire acres of the parcel over time, she understood that would delay engagement with the developer, but it could ease the economic strain on the City from attempting to master plan and envision what would eventually happen on the site. Mr. Tatum answered it was staff s understanding the property owner was interested in selling all his ownership in the property outright. Councilmember Nand observed until March 1, 2025, the City is still at liberty to tell the property owner to market it and see what happens and attempt to reengage in negotiations after that point. Mr. Tatum agreed the City could abandon its option and the property owner could do whatever he wants, retain it, modify it, develop it, sell it, etc., and the City would be free to do whatever it wished as well. Edmonds City Council Approved Minutes June 4, 2024 Page 23 Councilmember Nand observed the City has been quite direct in engaging with the state delegation on the Edmonds Marsh, obtaining an option, etc. She asked if there was anything stopping the City from approaching the delegation to inquire about potential grants and funding sources or was there a reason the City had to go through J2. Mr. Tatum answered no, but the City is not a developer and so it makes sense for the developer to seek funds for development. The City can be a great partner in that effort such as providing supporting documentation, participating in the project, etc. to help the developer secure funding. Ms. McLaughlin explained the City can also bring infrastructure funds to offset developer obligations. For example, the $22M provided by the state for Highway 99 improvements are favorable to the development team. Councilmember Nand said she has always been very interested in exploring this project and seeing what the possibilities are, but if the 10 acre bite for $37M will be too much for a city the size of Edmonds to chew, she would be interested in the condominiumization before executing on the $37M deal and go back to negotiations with the property owner about acquiring smaller portions piecemeal over time that could eventually be assembled and developed to spread out the pain financially. SI�K111104 I KV-130 10 1 0412f." Councilmember Eck commented she was honored to live in a City that approved a proclamation for Pride Month and has an array of activities for Pride Month although she acknowledged there is a lot more work to be done. In her experience working in human services, approximately 40% of all street and homeless youth are LGBTQIA and have had to flee or were kicked out and are now homeless. Protecting youth is near and dear to her heart and anything that can be done to continue to support youth is very important. The City should feel good about the proclamation and keep doing the hard work. Council President Olson wished her husband a happy 35t' wedding anniversary today. Councilmember Paine loved that the City has these celebrations. She gets unreasonable excited about transit options, but Pride takes the cake for June. Celebrating Pride Month provides visible support for community members who have gone through a lot of strife, noting the ability to openly celebrate who you love and who you are is relative recent in history. It is wonderful to recognize Pride Month and support families and neighbors. She referred to a list of Pride events happening in Edmonds. Councilmember Nand provided an anecdote she shared with Pride of Edmonds members; when she was an Edmonds Community College student in 2007, a contingent from the college had an entry in the Seattle Pride Parade. When they reached the marshal, someone shouted, there are gay people in Edmonds? The ten events and years of work done by Deputy City Clerk Nick Falk, members of Pride of Edmonds, Rowan Soiset with Edmonds Queer Youth Alliance, demonstrates there are gay people in Edmonds. She was extremely proud of the LGBTQ+ community and proud of the way the City is showing love and inclusivity and embracing everyone, because everyone belongs in Edmonds. 11. MAYOR'S COMMENTS Mayor Rosen thanked the community, the council and the staff who participated tonight. ADJOURNMENT With no further business, the council meeting was adjourned at 10:29 pm. Edmonds City Council Approved Minutes June 4, 2024 Page 24 SCOTT PASSEY;tKCLERK Edmonds City Council Approved Minutes June 4, 2024 Page 25