The Highway 99 Landmark Site Property Acquisition
Q: What is the Option to Purchase and why is it important?
A: The first small step is to put a “hold” on the property so the city can develop the community’s vision for the property through resident engagement. It also allows time to investigate the possibility of funding options and partnerships. The Option to Purchase has two parts – the first 6 months in which the $100,000 is refundable, and then the next 12 months. During this 18-month time period the owner cannot sell the property to any other party and the city has time to work on the tasks mentioned above as well as complete due diligence.
Q: What is the due diligence on property like this?
A: Due diligence could include several tasks to investigate the property. A Phase 1 Environmental Site Assessment (known as ESA or Phase 1 ESA) to investigate the past and present usage of the property for potential impacts to soil or water beneath the site that could pose a threat to the environment and/or human health. Reviewing of documents such as the property’s title, ALTA survey (boundary survey using American Land Title Association), topography study or researching potential property restrictions such as easements, conditions, restrictions.
Q: Why not just purchase the 3 acres of undeveloped open space in the back of the lot?
A: This was considered previously considered as a parkland acquisition, but not pursued due to the initial amount of the appraised value.
Q: Where does the Purchase and Sale Agreement (PSA) fit into this process?
A: The basic components of a PSA are included in the Option to Purchase as an attachment. During the first six months of the Option to Purchase, the city and landowner finish negotiating the details of the PSA. At the end of those six months, the PSA is finalized with approval of the City Council. The city then has the next 12 months to execute the PSA, which then, and only then, commits the city to purchasing the property.
Master Planning
Q: What is master planning?
A: A master plan solidifies a unified vision for the site. The vision is developed in partnership with all the key stakeholders, but most importantly with the community. A master plan is informed by policies and plans for the subarea but provides a detailed analysis of the site, including but not limited to land use opportunities, access, multi-modal circulation, environmental factors (stormwater, trees, habitat), open space, and neighborhood integration.
Community Renewal
Q: What is community renewal?
A: Community Renewal is an urban planning tool used to revitalize areas where aging infrastructure and buildings, technological and social changes, obsolete planning, and/or other factors are inhibiting healthy growth and change. Cities like Shoreline, Olympia, and Tukwila have used this tool to help revitalize areas challenged by similar issues to those along Highway 99 in Edmonds.
The community renewal law (RCW 35.81) empowers cities with a variety of tools to remove the barriers to positive change. For example, a city can acquire, transfer, and/or sell property for development that meets community needs, supports local businesses, and/or catalyzes investment. A city can also assist property owners, tenants, and residents affected by redevelopment, and/or provide incentives for job creation and retention.
The City of Edmonds has recently released the draft Highway 99 Community Renewal Plan which outlines corridor issues and recommends an action plan to promote positive change in accordance with the community vision.
Tax Increment Financing
Q: How does it work? What are the benefits?
A: Tax Increment Financing (TIF) is a financing tool that municipalities can use to fund large scale infrastructure projects in order to catalyze positive redevelopment. TIF captures property taxes generated from the increased assessed valuation on a publicly owned site that results from private development following infrastructure investment.
TIF is widely used across the nation, but Washington state cities have only recently gained access to this tool as state legislation was signed on May 10, 2021. Though property tax revenue increases are typically limited to 1% annually, a TIF allows a city to collect revenue on the increased value of properties at the normal tax rate, bond against the expected future tax revenue, and use those funds to construct the designated infrastructure improvements. Tax rates in the area do not rise, but the city will collect more revenue due to the increased property values created by the infrastructure improvements and new development.
Once the bonds are repaid, the increment area is dissolved, and taxation is distributed per the normal percentages to schools, ports, counties, and other entities.
Example infrastructure eligible for construction and/or improvement includes:
- Streets and sidewalks or other non-motorized transportation facilities
- Parks, recreation and community facilities
- Water, sewer, and stormwater systems
- Transit facilities
The Process
Q: Will I be able to make my thoughts and voice heard before the city agrees to anything?
A: Yes. There MUST be open public processes for the following:
- Property acquisition
- Master plan
- Tax Increment Financing (TIF) ordinance
- Budget
We estimate at least ten touchpoints in open city council meetings to bring all of this forward. We envision many more touchpoints with the community in smaller project groups, public meetings, or in council committee meetings.
Q: Are we committed to any part of either TIF or Community Renewal if we agree to the Option to Purchase?
A: No. Each are separate efforts. The option to purchase gives the city time to devote to finding the right mix of financing and uses for this property. The administration and members of the city council will interact with residents in small and large groups over 18 months before committing to a purchase.