Seattle City Council Approves Amendment to Building 11 Lease

UPDATE (8-11-11): Councilmember Bagshaw has provided another update on her blog.  In it, she explains that the full council has now approved the amendments to the lease, with Councilmember Burgess as the lone vote against the amendments.

UPDATE (8-5-11): Councilmember Bagshaw, who chairs the Council’s Parks and Seattle Center Committee, provided an update on her blog about the Building 11 lease. In her post, Councilmember Bagshaw recognizes “the engagement of our citizens and their passion for our parks. I (Bagshaw) extend my appreciation to everyone who called, emailed, and provided testimony at our meetings. Future public/private partnerships will be better thanks to your collective involvement in this matter.

CORRECTION:  As Ms. Chiarello with Friends of Building 11 described more accurately, the Seattle Council’s Parks and Seattle Center Committee voted in favor of the lease amendment, not the full council.  The legislation goes to the full council next week for approval.

We have not been closely reporting on the controversy at Building 11 in Magnuson Park on this blog as others have done an exceptional job at that.  However, many in NE Seattle (including the Wedgwood Community Council) have voiced their opposition with the Building 11 lease arrangement that the Parks Department entered into with Building 11 Investors, LLC.

Today, the City Council took up an amendment to this lease with Building 11 Investors, LLC. While nothing formal has been issued from the City yet, Gail Chiarello with Friends of Building 11 sent out the following message with the following subject line: WE WON!!!!!!!

The Parks Committee passed Version A of the Building 11 lease amendment this morning.  Thank you for the e-mails and for appearing in person.  The community has prevailed, and it’s pretty amazing.  An analysis of what we won–and what we didn’t get, because it wasn’t perfect–will follow this weekend, but I wanted to let everyone know that the Good-Government Version of the lease passed, unanimously.  Those voting in favor were the Chair, Sally Bagshaw, the Vice Chair, Tom Rasmussen, and City Councilmember Nick Licata.
Parks Committee member Bruce Harrell was not present, nor was the alternate, Jean Godden.
The legislation goes to the full City Council this coming Monday afternoon..  If you still have strength in your fingers for a last e-mail, please write the remaining Couniclmembers in support of the Building 11 Version A legislation as it was voted on in today’s Parks Committee.  Addresses are:,,,,,
Based on this message and the note that Version A of the lease amendment was passed, these are believed to be the accepted revisions to the lease with Building 11 Investors, LLC, as described in the Staff Memorandum dated 04 August 2011.
1. Immediate Cash to City – 50% Value of Any Tax Credits (Item A1). Section 4.3 & 5.1.1
  • New provision requiring 50% immediate payment to City, instead of 75% to City at Year 30 of Lease.
  • This action increases short-term revenue to City by $750K to $900K, and decreases long-term revenue to City by $1.15 to $1.3 million.
2.  Initial Lease Term – 40 Years, or 30 Years if No Tax Credits Received (Item A1). Section 3.1 to 3.2.1
  • New and revised provisions, reducing Initial Term to 30 Years if Tax Credits are not received.
  • Total term: Initial + Extensions, remains at 45 Years.

3. Public Benefit Rent Offsets – Elimination (Item B1). Section 5.3

  • Eliminate provisions allowing Lessee to offset rent for public benefits provided at Building 11, but maintain minimum public benefits requirements.
  • This action increases revenue to City by $2.2 to $5.5 million over 45 years.

4. Restore Space for Water-Related Uses to 8,000SF (Item C1). Section 2.5.4

  • Increase minimum required space for Water-Related Uses from 5,000SF to 8,000SF, as required under 2008 Lease.
5. Restore “Good Faith Clause” to 3,000SF of Water-Related Space (Item C1). Section 2.5.4
  • Restore good faith lease-up clause to 3,000SF of Water-Related space.
  • If Lessee cannot find suitable tenant, Parks Dept has three months to do so. If Parks Dept cannot doso, space reverts to another Primary Parks use.
6. Refine Language for Water-Related Uses (New Item). Section 2.5.4
  • Revise definition of Water-Related Use to emphasize recreational activities and closely related retail.

7. Commercial Use – Eliminate “Institutional” and “Medical” References (Item D1). Section 2.5.3

  • Eliminate references to allowable Institutional and Medical uses at Building 11.

8. Artist Space – Reject Definition as “Primary Parks Use” (Item E1). Section 2.5.2 & 2.5.3

  • Amend Lease to reclassify Artist Space as “Other Parks Use,” as in 2008 Lease.
  • This action increases Park and Recreation-related uses from 12,000SF to 17,000SF.

9. Rent for Artist Space and Water-Related Space – Establish Cap (Item F1). Section 2.5.4 & 2.5.5

  • Add new affordability provisions, establishing maximum average lease rates ($13 for Artist, $13.50 for Water).

10. Outdoor Play Areas – Define Public Hours (Item G1). Section

  • Add language defining public hours at Outdoor Play Areas as weekday evening after 7 PM and all day weekends and holidays.

11. Eliminate Restaurant Exclusivity Provisions (Item J1). Section 8.6.1

  • Remove language granting Building 11 LLC exclusive license to operate restaurants in Magnuson Park, for ten years, except those (a) at Building 27, or (b) with fewer than 21 seats or smaller than 1,000SF.

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