Tacoma City Council OK's contract for Sauro's site parking project downtown

A massive, half-block hole in the middle of downtown Tacoma will soon be filled and converted into a surface-level parking...

A massive, half-block hole in the middle of downtown Tacoma will soon be filled and converted into a surface-level parking lot, according to action taken Tuesday at City Hall.

Tacoma City Council approved a purchase resolution that awards 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.

The decision was made by a vote of 6 to 3.

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 company moved to Seattle last year.

The strongest argument against the project came from Councilmember David Boe, who argued the city didn’t need another parking lot. Instead, it should think long-term about the site’s future.

“My feeling is what we really should do is vote against this resolution, take it back, look at some options that we could do with this money, and go back to the state,” said Boe, who kicked off a long discussion before council voted on the item. “If we can’t develop, get an extension for the timeline, see if we can use it for the light rail going in, which is consistent with the plan, consistent with the need to retain great employers downtown. If that is not possible, we need to give that money back to the state and say we cannot use this wisely, we are not doing this efficiently, we are devaluing the piece of property the city owns for future development to meet the comprehensive plan goals, to meet the vision that we have for what our downtown is.”

Still, he urged his council colleagues that if the purchase resolution was approved, the site should be turned into an underground parking garage instead of a surface-level parking lot.

“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,'” Boe commented. 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.”

Councilmember Marty Campbell, who also voted against the purchase resolution, supported Boe’s idea of looking long-term at the site. “I think from the moment this first came up, Councilmember Boe has been kind of ringing a little bit of an alarm bell, but really has asked us just to take a look at what our documents are, what our comprehensive plans are, and what we want for our downtown,” said Campbell. “I believe it is okay to have a bold vision for downtown and to have high standards for our community. I don’t believe the surface parking lot is meeting those high standards and I will be voting against this in hopes we can go back and look at another option for this.”

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.”

Councilmember Joe Lonergan agreed. “One of the standards that I hold dear is keeping our word,” he said. “I think we need to get out of our own way and start making sure that the message is clear that developers are welcome in Tacoma, that business is welcome in Tacoma, and we’re going to help — not hinder — the development of business in our city and the expansion of business. [We] say ‘thank you’ to DaVita for their commitment to expand and show them we’re serious, when we say what we say, we mean it.”

“A promise is a promise,” said Councilmember Victoria Woodards. “I’m personally not in favor of another surface parking lot on Pacific Avenue. Matter of fact, when we first started having this conversation, we were hoping to potentially find more money so someone could build above it, but that just didn’t work out. In the meantime, we have a really good employer who is still downtown and willing to stay in Tacoma. For that reason, I will support it, as well.”

Councilmember Spiro Manthou also supported the purchase resolution, adding that developing the site into street-level parking wasn’t the ideal plan, but it was better than leaving a huge hole in a very visible part of downtown. “There are numerous things that attract development in the downtown core,” he said. “But for us, it is not having a big hole in our freeway. It is a way to encourage people to come to town and if you talk to the developers and brokers downtown, they will purposely bypass that area when bringing clients in town so they don’t see that. So I think something has to be done. Is this the perfect answer? Maybe not. We’re still going to aggressively market this site, whether it is a parking lot or a big hole, and I would rather see it done in an attractive way which is a parking lot with landscaping, than have it done as a big gaping hole.”

During Tuesday’s meeting, several councilmembers also argued the funds being used for the project came from the State of Washington with some strings attached. Last year, Councilmember Boe asked if a Request For Proposal (RFP) could be prepared asking developers to submit their ideas for a two-story underground parking garage. In a June 24, 2010 report to City Council ( http://www.cityoftacoma.org/Page.aspx?hid=14933 ), City Manager Eric Anderson 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;

— RFPs 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.

Also, the money needed to be used by the end of this year or else they would be lost.

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 million clean-up effort. 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.

During Tacoma City Council’s meeting Feb. 8, several councilmembers commented on the purchase resolution before taking a vote. Here are some of their comments, which have been edited for space.

I. Councilmember David Boe

I will not be voting in favor of this project and part of it goes back to being an architect and one of the unique things about — 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.'” And it is not till you really understand how Tacoma is built and the soil conditions in Tacoma. Tacoma is built on hard pan and rock and Seattle and Bellevue are built on fill. Those cities are easier to go down and dig out, and you have to do that anyway to dig your building so it is conducive to that. But Tacoma is very difficult to go underground for parking because of that, except for properties that are east of Pacific Avenue downtown. Those are properties that, because of the way the land goes, have the opportunity to have underground parking.

So here we have a site that city purchased, cleaned up, and, for me as an architect, is ripe for development. It 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. And 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. From a development standpoint, from a city access standpoint, we have devalued that site for economic development. I think there are others way we potentially could have achieved the goal of the grant.

I feel that this is an issue where we need to make sure we are meeting our comprehensive plan. That is the other aspect of it. There is the development aspect and the comprehensive plan aspect. Our comprehensive plan on the downtown element is really good and very clear. Talking about the seven goals for our downtown plan, surface parking lot doesn’t even register. My feeling is what we really should do is vote against this resolution, take it back, look at some options that we could do with this money, and go back to the state. If we can’t develop, get an extension for the timeline, see if we can use it for the light rail going in, which is consistent with the plan, consistent with the need to retain great employers downtown. If that is not possible, we need to give that money back to the state and say we cannot use this wisely, we are not doing this efficiently, we are devaluing the piece of property the city owns for future development to meet the comprehensive plan goals, to meet the vision that we have for what our downtown is and, gee, could you maybe help out the history museum [with this money]? I know it is a different pot, but [use it] to keep it open?

Again, I urge my fellow council members to reject this resolution.

II. Councilmember Marty Campbell

I think from the moment this first came up, Councilmember Boe has been kind of ringing a little bit of an alarm bell, but really has asked us just to take a look at what our documents are, what our comprehensive plans are, and what we want for our downtown. I believe it is okay to have a bold vision for downtown and to have high standards for our community. I don’t believe the surface parking lot is meeting those high standards and I will be voting against this in hopes we can go back and look at another option for this.

III. Councilmember Ryan Mello

What I would offer to my colleagues is what keeps DaVita here — and almost any other great business — is not building a surface parking lot in the middle of downtown Tacoma. It is fixing the streetscape, which our staff and city council are very hard at work on, securing well over $10 million and advocating with our legislative delegation in Washington, D.C. to fix our streetscape. That is the thing that will keep DaVita and other companies — make our front porch clean, beautiful, safe, and attractive. The new light rail stop, which Councilmember Jake Fey and the city manager have been working [on] cooperatively with Sound Transit [and] Pierce Transit will keep an employer like DaVita. A vibrant downtown with people circulating and walking and shopping. Workers like me don’t want to be in a ghost town. [Those things are] going to keep DaVita. Not ruining a space that, quite frankly, is bad for business, bad for development, bad for urban walkability. I feel our staff is doing the best they can under a strict timeline. But that is not a reason to throw good money after bad. If we develop the site, it will stay a surface parking lot for decades. That is not consistent with our comprehensive plan. I would offer the solution is to vote this resolution down, reject all bids, [and] for us not to be short-sighted [and] to follow the comprehensive plan. Ask for more time from the state. We have a delegation in key leadership positions that could give us the time to get the money more strategically and market it in a favorable market to recruit some private capital. I urge folks to reject all bids and go back to the drawing board.

IV. Councilmember Spiro Manthou

I respect the comments of Councilmember Mello. He is right. There are numerous things that attract development in the downtown core. But for us, it is not having a big hole in our freeway. It is a way to encourage people to come to town. If you talk to the developers and brokers downtown, they will purposely bypass that area when bringing clients in town so they don’t see that. So I think something has to be done. Is this the perfect answer? Maybe not. We’re still going to aggressively market this site, whether it is a parking lot or a big hole, and I would rather see it done in an attractive way, which is a parking lot with landscaping, than have it done as a big gaping hole.

V. Mayor Marilyn Strickland

When I was in Denver at the National League of Cities and there was an e-mail trail going on about what to do about this, there were a lot of people speaking on behalf of DaVita. So I called the president and spoke with him directly. We talked about this, and this is the expectation that they had.

Is another surface parking lot in downtown Tacoma the perfect situation? Probably not. But there is the reality of where we are right now. This whole notion that we’re going to get this development happening in the near future is unrealistic no matter how hard we market it. And one of the things we have to do is make sure downtown Tacoma looks its best. A giant gaping hole with a chain link fence in the main corridor does not say, ‘This is where I want my business,’ or, ‘This is where I want an office.’ So this is a long-term decision we have to make. If a developer comes along and says, ‘Gosh, look at that parking lot I have to get rid of,’ this is something we control. We can negotiate that. We’ve worked so hard to create a positive business climate and are still trying to get there. We raised the threshold for the B&O tax, and now to go back on our word to a business that stayed here, it shows bad faith.

VI. Councilmember Joe Lonergan

I will tell you what I heard — or what I believe. We were given the property by the owners along with some cash because the owner didn’t want to be responsible for the mitigation of the environmental hazards on that property. So we didn’t buy the property, we acquired it and were given cash for some remediation and we have spent a lot of money to remediate it. So we’re into this property for a lot more than it would have cost us to buy it. But it was the right thing to do and we have done it.

The mayor articulated some of my points. We own the property. We can do what we want with it. We can sell it for what we want to sell it for. If it makes sense, we’ll hear the offers and any developers that are listening that might want to come with an offer. I wouldn’t mind paying a penalty for going back on this contract if we could have some building on that lot right now.

But we have been talking about this for a year and no one is stepping up to build on this property. I don’t think it’s necessarily because it is a poor property, although it is size-limited. But I think it very realistically is the economy and availability of space in Tacoma, and we’ve got a lot of available space and just acquired some more in our inventory.

We have talked about high standards, and I believe we should have high standards in our downtown core, as well as throughout our city and every neighborhood. But one of the standards that I hold dear is keeping our word. If this were a labor contract right now, we would be on the fringe of lawsuits for bad-faith bargaining. So we need to be careful how we deal with our business partners, as we are with our labor partners, and I think that is important.

If we do nothing right now, we will have a hole. We might have a very nice streetscape in front of that hole, but we’ll still have a hole. I think we need to get out of our own way and start making sure that the message is clear that developers are welcome in Tacoma, that business is welcome in Tacoma, and we’re going to help — not hinder — the development of business in our city and the expansion of business. [We] say ‘thank you’ to DaVita for their commitment to expand and show them we’re serious, when we say what we say, we mean it.

VII.Councilmember Jake Fey

The first thing I want to say is, ‘Good for you, Councilmembers Mello and Boe.’ Your viewpoint, I don’t think, was expressed when the conversation was held with the city manager about what the negotiation was going to be with DaVita and what we were going to be offering them to retain their business. As it turns out, I wasn’t present either, so I was surprised when this came up that we were going to have this plan for this property.

Now, that being said, I will reluctantly support this because had things been different — I would have liked them to be different. But I did also speak with [DaVita Vice President Jim] Hilger and won’t speak exactly for the conversation, just what I took from the conversation. And what I took from the conversation was we had made a deal, that the property was unacceptable in its present condition and he was less than patient with me inquiring any further into this because I believe he felt that he had a deal that needed to be honored. So for me, it is all about your word because at the end of the day, that is all you have to say for yourself.

So for that reason, like I said, I will reluctantly support this. I don’t think this is the best — or even the above-average — outcome for this development. But it is what we agreed to and offered up to the developer and I believe we need to keep our word.

VIII. Councilmember Victoria Woodards

I want to agree with Councilmember Fey and the mayor. A promise is a promise. I’m personally not in favor of another surface parking lot on Pacific Avenue. Matter of fact, when we first started having this conversation, we were hoping to potentially find more money so someone could build above it, but that just didn’t work out. In the meantime, we have a really good employer who is still downtown and willing to stay in Tacoma. For that reason, I will support it, as well.

– – – – EARLIER TACOMA DAILY INDEX COVERAGE – – – –

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.

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