A decision made earlier this month by Tacoma City Council to fill a half-block hole in downtown Tacoma and turn it into a street-level parking lot instead of marketing the city-owned site to serve as the base for a mixed-use development project was hindered by a lack of developer interest, a “glut” of vacant office space, and a commitment to one of downtown Tacoma’s largest employer, according to Tacoma City Manager Eric Anderson.
On Feb. 8, City Council approved a purchase resolution to award a $601,687.00 contract to Serpanok Construction, Inc. of Tacoma to turn the city-owned parcel located at South 14th Street and Pacific Avenue, formerly the site of Sauro’s Cleanerama, into a space for street-level parking. In January 2010, Gov. Chris Gregoire allocated $700,000 from Washington’s Strategic Reserve Fund toward the project in an effort to boost the local economy. Originally, the money was to be used to keep Russell Investments headquartered in downtown Tacoma. The site was going to be part of a so-called ‘super block’ should Russell Investments decide to remain downtown and develop additional office space. The company moved to Seattle last year. The decision earlier this month to approve the purchase resolution was made by a vote of 6 to 3, and was preceded by questions from several councilmembers who asked why the city was creating another parking lot in a downtown already teeming with parking lots.
“I hear it a lot from people who come to Tacoma: ‘How come there aren’t underground parking garages?’ Other cities have them and Tacoma seems to have above-ground parking garages,'” said Councilmember David Boe during the Feb. 8 meeting. He pointed to the fact that cities such as Seattle and Bellevue are built on fill, making it easier to dig out space for underground parking. Not so in Tacoma, where most of downtown is built on hard rock. “[The former Sauro’s site] is just perfect on Pacific Avenue, half a block from the light rail station, you could not ask for a better freeway access off of I-705 and the exit ramp. It is already a 20-foot-deep hole with the alley being 10 feet below Pacific Avenue right now. So to put in a level or two or three of parking is a developer’s delight.
“What I am having difficulty with — and have had difficulty since this project has gone forward — is we are filling the site, which means we are making it less desirable for development,” added Boe. “What that means is we’re taking $700,000 or $601,000 and putting all of that into the site [and] filling it, which means any time it is going to be developed, you have to take all of that away. You have to take the rock wall away, all the fill away. So from a development standpoint, from a city access standpoint, we have devalued that site for economic development and I think there are other way we potentially could have achieved the goal of the grant.”
But building a parking lot on a site adjacent to DaVita, one of Tacoma’s largest employers, was part of a plan to keep the company’s headquarters downtown. Mayor Marilyn Strickland said she spoke with DaVita’s president last year and he told her adding a parking lot next to their headquarters was an expectation they had based on their discussions with the City. “We’ve worked so hard to create a positive business climate and are still trying to get there,” added Strickland. “Now to go back on our word to a business that stayed here, it shows bad faith.”
In his weekly report of Thurs., Feb. 24 ( http://cms.cityoftacoma.org/cityclerk/Files/CityCouncil/CMOWeeklyReport/2011/WklyReport20110224.pdf ), City Manager Anderson responded to these concerns by citing a number of reasons to turn the site into a street-level parking lot.
“The city worked for about 1.5 years or so with representatives of developer Erivan Haub to incorporate the site into the plans to accommodate Russell Investments’ future growth,” wrote Anderson in his report. “The city received an inquiry to develop a two-story structure on the site, but the proponent was in the early stages of exploring alternatives and could not provide sufficient information to move forward with a viable proposal. The city included the site on its developer tour in April 2010. The city has not aggressively marketed the site due to the downturn in the economy and the glut of office space on the market presently. Also, lease rates for existing space are far more competitive than those for new construction.”
Anderson also noted that when Russell “announced its departure from Tacoma, the governor directed her staff to work with the city to repurpose the funds so long as the use met the legislative intent of supporting job creation. DaVita stated that parking was critical for it to remain and expand in the downtown. The city proposed that it would assist the company with parking.”
Finally, Anderson noted turning the site into a parking lot serves the spirit of the original grant: “The city submitted the $700,000 construction grant on May 21, 2010. The grant summary states that the city shall restore three parcels for immediate productive re-use and future private redevelopment. Immediate productive re-use was further defined as interim parking use on the city-owned property to support DaVita’s employment expansion at its regional headquarters. Activities included, but were not limited to, site, street and sidewalk infrastructure improvements . . . in addition to sidewalks at Pacific Avenue, South 14th Street and Court A.”
Anderson’s notes in Thursday’s report are similar to those made in his June 24, 2010 report to City Council ( http://cityoftacoma.org/Page.aspx?hid=14933 ), where he outlined some of the caveats associated with using the money to develop the site. According to the report (published verbatim here):
— Developers would not be able to use the $700,000 grant because State funds cannot be used for a private purpose. The Washington State Constitution prohibits the lending of public credit for private gain. The Governor’s Strategic Reserve Fund is to be used for publicly-owned infrastructure needed to assure job retention or creation;
— Construction of a two-level parking structure is estimated to cost $3.3 million to construct with a projected 30-year payback if stalls are leased at $125 per stall. This approach limits future building development because it lacks flexibility. It pre-determines the size and configuration of the future building footprint and may not allow for a larger building to be constructed;
— It is unlikely the city would yield the highest return on investment if the property were sold in 2010 for parking. It would forego the future value of the property when the economy recovers as well as the potential to negotiate quality development with significant tax base and job creation. It is conceivable that parking alone would remain during the long-term or a one- or two-story structure be built on the site, which would not support the highest and best use;
— Requests for proposals are time-consuming and do not guarantee there will be qualified responses. If the city intends to retain the $700,000 grant, it must begin its planning on the selected design alternative by the end of July in order to complete all work by June 30, 2011, which is the State contractual deadline.
For more than a decade, the former Sauro’s site sat abandoned due to a toxic legacy. In May 2009, the Washington State Dept. of Ecology released a report ( http://www.ecy.wa.gov/programs/tcp/sites/sauros/sauros_hp.htm ) that showed the site had “levels of the dry cleaning chemical perchloroethylene and its breakdown products in the soil and groundwater that exceeded state Model Toxics Control Act cleanup standards.” The site was once used as a store, bus terminal, and boarding house. For 50 years, however, it was home to Sauro’s Cleanerama. Over the past three years, the city purchased the site and partnered with the Dept. of Ecology on a $2.6 million clean-up effort ($1.35 million came from Washing
ton State remedial action grant; $550,000 came from the City of Tacoma; and $700,000 came from real estate excise taxes). At one point, the site was going to be part of a so-called ‘super block’ should Russell Investments decided to remain downtown and develop additional office space.
– – – – EARLIER TACOMA DAILY INDEX COVERAGE – – – –
Tacoma City Council OK’s contract for Sauro’s site parking project downtown — http://www.tacomadailyindex.com/portals-code/list.cgi?paper=88&cat=23&id=1922916&more=0
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Sauro’s site closer to becoming parking lot — http://www.tacomadailyindex.com/portals-code/list.cgi?paper=88&cat=23&id=1921531&more=0
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Washington State economic development funds slated for downtown Tacoma
Jan. 15, 2010
Gov. Chris Gregoire Friday announced she would direct $700,000 in state funds to investments in Tacoma to retain and boost business in the city.
Funds awarded will be used to leverage Tacoma’s efforts to encourage business expansion and job growth in the city’s downtown neighborhood. Specifically, the money will go towards infrastructure investments aiding in the redevelopment of the old Sauro’s Cleanarama site located at 1401 S. Pacific Ave. in downtown Tacoma.
According to the Washington State Dept. of Ecology, the former dry cleaner’s operations contaminated the site with halogenated volatile organic compounds (HVOCs) — gases released by certain solids or liquids. On a polluted site, the liquids and solids can be present in soil and HVOC gases can be dissolved into groundwater. Sources include dry-cleaning chemicals, paints and paint strippers, and pesticides.
The cleanup site includes three vacant lots — 1401, 1407, and 1409 S. Pacific Ave. The lot at 1401 S. Pacific Ave. was first developed during the 1880s. The first structures were boarding houses and a hay and grain store. The site was then a bus terminal from the 1920s until 1957. In 1961, Sauro’s Cleanerama began a dry cleaning operation. The building was demolished after they went out of business in 2000.
A hotel and laundry occupied the lot at 1407 S. Pacific Ave. from the late 1800s until 1971. Sauro’s Cleanerama used the vacant hotel building for storage in the 1990s.
The lot at 1409 S. Pacific Ave. hosted several businesses, from a farm implement and seed store, to a tailor and clothes cleaner. The entire site has been vacant since 2000.
Together with other investments by the city, the funds pave the way for an expansion of DaVita Inc., which is expected to add more than 350 jobs in Tacoma. DaVita is one of the largest providers of dialysis services in the country.
Funds will be allocated from Washington’s Strategic Reserve Fund, which allows the state to rapidly respond to help make economic deals quickly and efficiently.
“We can rebuild our economic future by all working together,” Gregoire said. “With the infusion of these funds, Tacoma will be able to make investments that will help it keep and attract businesses.”
“Tacoma is open for business, and these funds will help us attract private investment,” Tacoma Mayor Marilyn Strickland said. “With this money, we’ll be able to make our city center more attractive to business and create jobs.”
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Cleanup work begins on key downtown Tacoma property
Jan. 30, 2009
Cleanup work has begun on a key piece of downtown Tacoma property at the southeast corner of South 14th Street and Pacific Avenue. This follows the City of Tacoma’s acquisition of the site and City Council approval of an environmental remediation and indemnity agreement with an adjacent property owner, the Haub Brothers Enterprises Trust.
On Jan. 27, City Councilmembers authorized an agreed order with the Washington State Department of Ecology for cleanup and groundwater monitoring of the property, formerly the site of Sauro’s dry cleaning operation. The City’s agreement and acquisition of the property will allow Haub to proceed with acquiring the U.S. Post Office site, located directly northeast of the former Sauro site, because it removes a development barrier related to groundwater contamination. Haub’s acquisition will create a larger, developable parcel, when combined with its property between South 13th and South 14th streets and between Court A Street and Pacific Avenue, which will accommodate a potential new headquarters for Russell Investments.
The agreements approved by the City Council do not make the City liable for Haub’s obligations, but rather they establish a roadmap for cooperation and coordination on future development on the site.
The property is within the International Financial Services Area in the downtown core.
