Free Stuff is Good Public Policy

South Lake Union

South Lake Union, photo by Rik_C. Vulcan wants to build tall buildings on the parking lots across from this park.

The Seattle Times has reported that the City Council has declined Vulcan’s offer of $10 million or so worth of free real-estate in South Lake Union in exchange for allowing Vulcan to build three taller towers in that neighbourhood:

Vulcan would transfer to the city 37,600 square feet of land on a block bounded by Broad and Republican streets and Dexter and Aurora avenues. The city could add that chunk to a smaller piece it owns to create almost a full block available for an array of social services and housing.

The Vulcan land, with an estimated value of $10 million to $12 million, would count as a credit toward fees Vulcan would pay to erect condo or apartment towers up to 240 feet on three lakefront blocks it owns and elsewhere in the neighborhood.

Zoning now allows 65-foot buildings on the three so-called Mercer blocks. Vulcan would pay bonus fees to go from current zoning to 160-feet, or 16 stories. Then it would need to provide extraordinary additional public benefits to reach 24 stories.

Often, we make the abstract argument that requiring shorter or smaller buildings reduces affordability, but rarely do we get something so concrete. It costs the city (and thus the tax payers) nothing to allow Vulcan to build taller buildings. In exchange for that, the city would have received something valuable, free land near Downtown Seattle for use in low-income housing. The literal choice was between 1) taller buildings and free land for low-income housing (along with higher property tax income) and 2) shorter buildings and no land for low-income housing, though possibly some cash down the line.

If as a city, we think we can get a better deal, fine, say that. But please no one say this:

Mayoral candidate Peter Steinbrueck had blasted the Block 59 proposal for “privatizing the city’s land-use code.”

Yes, we certainly wouldn’t want to set the dangerous precedent of the tax payers getting millions of dollars of land in exchange for something that costs them nothing. The article said the deal may be revived at some later date. I hope so. As a taxpayer, if the city can get materiel for important social functions for free, I think that’s a deal the city should take. And I’m going to make sure the city council knows that when I vote.




Comments

  1. Matt the Engineer says:

    From the article: “none of them wanted to advance the specific proposal made by Mayor Mike McGinn late last year.”

    And here we go again. The council would let half of Seattle fall in the sea in order to keep McGinn from looking good. He was right on the tunnel, and he’s right on this.

    “‘I personally don’t believe it’s appropriate,’ said Councilmember Tim Burgess, a mayoral candidate” Uh huh. Politics as usual.

    • Andrew Smith says:

      Exactly. Politics trumping good policy is a disaster for everyone but the people on the council.

  2. Steinbrueck is the worst. Geez.

  3. Justin Elder says:

    One wonders if this would have worked in a non-election year.

  4. Agreed. Steinbrueck is an icky man. And the Council is toxic.

  5. If as a city, we think we can get a better deal, fine, say that.

    You mean like this:

    But council members had several concerns with Block 59, from the cost of developing and operating it, to whether it would preclude future councils from increasing bonus fees for Vulcan as land values in the area escalate.

    Maybe there’s more to it than political posturing. Frankly, I’m not sure what large voting block the Council would even be pandering to, Lesser Seattle? Does anyone really think Vulcan is making this proposal even though it will cost them more money just because the company has a deep seated desire to promote social services and affordable housing?

    Sharon Lee, executive director of the Low-Income Housing Institute, has said she’d much rather get land upfront than so-called bonus fees that Vulcan might pay, building by building, over years.

    Might pay? Vulcan’s offering $10M in kind because they might have to pay bonus fees? Sounds a lot like someone that’s willing to take 50 cents on the dollar at a payday loan store. Besides the “so-called bonus fees” there’s also the very real property tax that will be lost if the land becomes City property.

    • Andrew Smith says:

      Currently the zoning goes to 85′, 160′ with fees. Vulcan wants another 80′ (to 240′). In exchange, they’ll pay $10+ million (through land) instead of $1 million (or so) for 160′, and $0 for 85′. So the “might” is because they won’t have to pay fees if it goes to 85′. And the reason Vulcan is willing to pay more is because they want even more height than what the current rules allow, even with bonuses.

      The property tax argument is salient, but wouldn’t the 240′ towers more than make up for it?

      • So Vulcan has already tipped their hand that they’d be willing to pay $10M for the bump up to 240′. The City/County then pocket the increased property tax in addition to bonuses and taxes they receive on what “might” be another ~160′ tower on the property offered. It seems like density advocates would want to support this outcome. The other consideration that needs to be addressed is, given the land, how does the City pay for new housing and social services. The plan with YT is to sell land to finance the redevelopment. What ever happened to the proposed City use of the PacMed building? That would seem to be less costly than SLU and would free up space the City already owns DT.

      • I have no idea what the actual proposal is, but from the article, I get the impression that it would not just be a trade for the bonus height on the three 240′ towers.

        The Vulcan land, with an estimated value of $10 million to $12 million, would count as a credit toward fees Vulcan would pay to erect condo or apartment towers up to 240 feet on three lakefront blocks it owns and elsewhere in the neighborhood.

    • The Dog Lady says:

      Get real Vulcan doesn’t pay property tax, take a look at the “Multifamily Family Tax Exempt Program”. Most of the Vulcan developments as well as most of the new developments going up in Seattle right now are built along those guidlines. They do not pay property tax for 12 years. That is a lot of money the county is not collecting. The difference will have to come out of your pocket.

      • Matt the Engineer says:

        Interesting. It seems like Seattle loves to play the incentive game. Take from the rich (tall buildings) and give to the poor (buildings with a bit of workforce housing). It would be interesting to look at the actual costs/subsidy when these two conditions exist in the same building.

        The MFTEP sounds like it could be a good gamble. Give away free money for building workforce housing, which gives an incentive to build. In 12 years we end up with more housing than we would have had, and therefore more property tax revenue. I wonder if this incentive is responsible for Seattle’s early recovery back to building homes.

    • I’m inclined to agree with Bernie. There’s probably more to this than just densityophobia or Steinbrueck posturing. If the Council is shocked, shocked that tall buildings are going into SLU, it should have lowered the upzone earlier. I suspect the councilmembers feel the $10 million Vulcan is offering is a big undervalue of the benefit of those extra stories, and that the city could get more under a different deal.

  6. Does it make sense to have 160′ buildings right along the lake front? Won’t that preclude “stepping up” in the blocks behind? It seems to me that the city should be planning the area between Westlake and the lake front as an assymetrical pyramid, with the taller buildings closer to downtown and along Westlake, but a step down for a couple of blocks (maybe from Bell south?) to match the retail district heights.

    Is this too rigid? I don’t know, but it seems like the most effective use of an increasingly valuable tabula rasa.

    • Sorry. “between Westlake Center and the lake front”

    • Who cares about stepping down heights toward the lake? Seriously, why does it matter at all? Should our building restrictions be about how Seattle looks from an airplane?

      What matters for good urbanism is the street level, and then the first few floors above it, diminishing every story up. That’s where our mandate should be: walkable, human-scaled, mixed-use urbanism, limiting curb cuts and blank walls and vents and stuff. Above that let the heights fall as they may.

      • How about how it looks from Lake level?

      • “Who cares about stepping down heights toward the lake?”

        Apparently the people of Seattle, through their elected representatives,do.

      • Frankly, the people of Seattle think too much like Peter Steinbrueck for the good of the city’s future.

      • @Bernie: Has anyone boating on Lake Michigan ever complained about the Hancock Center blocking their view? No, the Hancock Center is the view! Do people in Grant Park or Millenium Park complain about the various tall buildings along the edges of those parks? No, they take pictures of them! What about people on the Chicago River? They take boat tours to see the buildings along the river!

      • The Hancock building is a long way back from the Lake. Chicago is fairly protective of their waterfront. There’s one tall tower on the lake side of LSD and it sticks out like a sore thumb. Lake Michigan is like an ocean. You can’t even see the other side. Lake Union is a small little puddle. Yes it’s nice to look at the Space Needle from Gas Works. A glass curtain wall all along shore of the lake would destroy that and leave the Wooden Boot Center and MOHAI in a constant shadow. It would also make sailing almost impossible; bye bye Duck Dodge. And for what, so a handful of people can buy a condo where nobody can block their view?

      • Andrew Smith says:

        You guys are being ridiculous: no one wants to build anything next to the lake. The proposed towers are hundreds of feet from the shore, and only a couple of hundred feet tall.

        The Hancock building, OTOH, is 1,506′ tall. That’s nearly twice as tall as the tallest buildings in Seattle, and 7 times taller than what Vulcan wants.

        These buildings in Chicago are taller and nearer to the lake:
        https://maps.google.com/maps?q=875+N.+Michigan+Ave.,+Chicago,+Illinois,+United+States+of+America&hl=en&ll=41.899458,-87.619287&spn=0.003845,0.004227&sll=47.272986,-120.882277&sspn=5.076414,8.657227&t=h&hnear=875+N+Michigan+Ave,+Chicago,+Cook,+Illinois+60611&z=18

        I live near Gas Works, and trust me, you’ll still have a nice view, even with towers right up to the lake.

      • no one wants to build anything next to the lake

        No one is seriously proposing building towers next to the lake. Al is questioning the entire notion of even acknowledging the lake’s existence when it comes to rezoning for additional height. For the record, I have no beef with Vulcan’s requested increase in height. Nor am I blanket opposed to the land swap deal. I just think the City Council is being prudent in not jumping at this like it’s a TV infomercial offer.

      • “What matters for good urbanism is the street level, and then the first few floors above it, diminishing every story up. That’s where our mandate should be: walkable, human-scaled, mixed-use urbanism, limiting curb cuts and blank walls and vents and stuff. Above that let the heights fall as they may.”

        Sure, because what’s wrong with perpetual shadow? No one likes to be in the sun.

        “No, the Hancock Center is the view!”

        So is the Space Needle. Not just from the lake, but from the neighborhood, the freeway, Queen Anne, Capitol Hill, etc. You sure have a lot of faith in developers if you think they’re planning on constructing 240′ art pieces (I would NOT describe the Hancock building as a work of art…).

    • “It seems to me that the city should be planning the area between Westlake and the lake front as an assymetrical pyramid”

      The time to argue that was when the last upzone was being decided. The fact that the city has allowed highrises into SLU is the important thing. We don’t need to quibble now about whether it should “taper” or “pyramid” or whatever.

  7. I actually watched the entire public comment session on the proposal. Most people there seemed to be for it, including the usual suspects like transit advocates, construction companies, and social service advocates (because of block 59). Most of the opposition seemed to actually be cascade residents who were upset because they were left out of the upzone.

    It really goes to show what the people think isn’t really whats important to council.

    • You have to consider that Joe Geek doesn’t show up to these things. The neighborhood residents, social advocates (by definition public session vultures) and construction companies all have something directly to gain or lose. The rest of the City counts on the Council to do what’s in their best interest. A show of hands at a public meeting is absolutely the wrong way to make decisions or judge overall public sentiment.

      • You’re right. What I had really meant is “It really goes to show what the people AT THESE MEETINGS think isn’t really whats important to council.”

        I’m generally against these long public comment sessions anyway, for exactly the reason you stated. It’s a huge waste of time; only people with an interest will show up.

        Especially on something like zoning, most of the restrictions should be removed anyway. Zoning is central planning at it’s worst.

  8. Ok Bernie, if they were going to allow 500′ buildings in your neighborhood, of course the whole neighborhood would be against it. Are you honestly going to tell me that if the city council went ahead and allowed 500′ tall buildings in your neighborhood that you would just say “oh the city council is just doing what they believe is in our best interest”.

    • Ok Bernie, if they were going to allow 50′ buildings in your neighborhood, of course the whole neighborhood would be against it.

      There, fixed that for the east-siders among us. :-)

    • I have no idea what you’re on about. Our neighborhood association, BTCC, is very active and effective in city politics. They are also on average woefully uninformed as a whole and honestly somewhat embarrassing when it comes to meetings where we invite members of City staff or ST to come and talk (e.g. East Link is not going across 520, some of the MF locations were public knowledge, etc.). Kudos to those officials that have the gumption to show up! OTOH, on issues like clear cutting part of Bridle Trails State Park to accommodate a water tower benefiting a certain Bel-Red developer that funded a majority of the sitting city council I’m really proud to be a member.

  9. I guess not everyone in Seattle shares the urbanist’s dream of destruction by developers.

    • For the most part, what’s it any of the government’s business what someone does with their land?

      • You’re sounding like the people out in the sticks who rail against the GMA.

      • “what’s it any of the government’s business what someone does with their land?”

        …thanks for that. That’s why urbanists and their developer friends lose so many battles in Seattle.

    • A few more stories = “destruction.”

      If you can support that statement in any semi-comprehensible way, I’ll buy all your beers at the next meetup, even though you’re a troll.

    • Ben Schiendelman says:

      Kenny, if you build taller buildings, you get the same amount of new units (and meet demand) in a smaller footprint – destroying fewer existing buildings.

  10. Breadbaker says:

    If I were renting a building downtown with a north view, I’d be paying a significantly decreased rent to be looking at these buildings rather than Lake Union. And therefore if I owned those buildings, I’d be arguing that my property taxes should decrease. Between that and the increased city services the larger buildings would require, the idea that there is an absolute net gain from the increased property taxes Vulcan would pay on the buildings is an unproven assumption.

  11. I’m against this proposal, it’s right in the Lake Union seaplane flight pattern. You are just asking for a tragedy with towers that close, that high to the lake. Sorry.

    Oh and for the record, otherwise I’d love the proposal. But not at the risk of safety of the aviation community & the general public.

    If it’s any comfort, next Friday I will be taking SKAT+Sound Transit+streetcar down to watch the Kenmore Air take-offs & landings. I’d be happy to share the pictures with any of you.

  12. John Pehrson says:

    It’s too bad this blog didn’t get the story right to start with. It just takes reading the MOU. The MOU says: Vulcan sells (not give) their property to the City for market rate, as determined by professional appraisers, under conditions favorable to Vulcan.
    Instead of paying the cash to Vulcan, the City puts that cash into a bank account and Vulcan will use it to pay for incentive fees they will legally owe the City for any project they have anywhere in SLU (not just on these 3 blocks). The City agrees it won’t change the zoning and won’t raise the fees on Vulcan for 25 years.
    This sale and the funds in that bank account have nothing to do with the increase in height from 160′ to 240′.
    I think the Council was appropriately concerned whether getting that much land, without the money to develop it for human services, in one place, was in the best interest of the City. This difficult question was getting in the way of deciding on an important rezone, a decision that was really independent of the block 59 offer.
    Vulcan proposes a separate deal, about $1,000,000 per tower, as an added incentive to go from 160 to 240′. I think the Council was legitimately questioning whether that was the appropriate fee and whether that impact on the City was for sale.
    It really helps a discussion when you start with the truth. it just take reading the primary sources.

    John Pehrson

    • Andrew Smith says:

      Thanks John. I trust you gave similar feedback to the Seattle times?

    • I think this can be instructive for the pro-transit, pro-urbanist contingent out there. I consider myself a strong advocate of both, but we can’t become like the nimbys who say everything in my backyard is bad, only we say anything that increases density is good. Street level isn’t the only thing that matters. So do the long term revenue implications of a decision and whether developers are getting a sweet deal or not. We shouldn’t be making big decisions like this in some environment of developers have our urban best interests at heart. they don’t. They are interested in their wallet and as we saw with suburban developers they don’t much care about the vitality of the community. I think the council probably made the right move here. Bring it back, properly assess the fees, etc. and long term impacts, not just build because we need density. I think we run the risk as advocates of thinking we should eliminate every limitation on a free-for-all because otherwise we get the “seattle process”. There is a good, happy medium somewhere in the middle there.

      • Ben Schiendelman says:

        Brian, when prices are this high, everything that increases density pretty much IS good. The benefits of density are everything from cheaper per capita infrastructure to better public health to shorter commute distances to lower energy use. Slowing this down hurts poor people more than anything else, too, because those new Amazon employees are outbidding us for all the existing buildings.

    • I somewhat support the Council in their skepticism of the Block 59 deal. Vulcan is offering land it already owns (no money out of pocket), while the City will need to find and invest $50-$100 million to build affordable housing on this site. Money that is not currently allocated.

      Land is a small portion of the construction cost for an urban building. This “gift” of free land actually ties the City’s hand and forces them to pour a disproportionate amount of City housing resources on this site. The City would be better off with $10M cash they can use for construction/building purchase wherever the need is greatest.

      • P.S. Opposing the Block 59 deal does not mean opposing 240′ towers near the lake (which I support). The question at hand is what consideration the City receives for the zoning bonus, per the current incentive zoning rules.

  13. Ryan on Summit says:

    (ad hom)

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