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At its July 21, 2020, Council Meeting, the City Council voted to formally end the Commuter Parking and Mixed-Use Development Project. View agenda and meeting video here.
Watch this page for updates.
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July 14, 2020 - A Letter to the Community from Your City Council
Dear Mercer Island Community,
In January 2020, the City announced the completion of its multi-year effort to purchase the former Tully’s Property in Town Center, with the intention of providing commuter parking near the future East Link light rail station for use by Mercer Island residents.
Last summer, MainStreet Property Group was selected as the City’s partner and lead developer for design and construction of a project, which included underground commuter parking and a mixed-use development with performing arts space. In the packet of documents for the July 21 City Council meeting (to be released to the public tomorrow), a resolution will be included confirming the City’s decision to part ways with MainStreet over differences in our project vision that resulted in the parties reaching an impasse.
In addition to our differences, a large-scale project is not currently a viable investment for the City given our current fiscal realities of an unpredictable post-COVID-19 landscape and significant reductions in City staff. The City will consider independently pursuing a simpler solution, as an interim measure, including the possible construction of a surface commuter parking lot on the project site using Sound Transit Settlement Funds.
We know that pre-COVID-19 commuter parking for Mercer Island residents was in very short supply during the morning rush-hour. Following the completion of light rail in 2023 and after we are able to re-open our economy, we anticipate that commuter parking will eventually become scarce again, even with a greater number of people working from home.
We look forward to updating Mercer Islanders as the City addresses this evolving parking project.
-Mercer Island City Council
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On Friday, December 27, 2019, the City of Mercer Island completed its purchase of a key property adjacent to I-90, signaling another significant step in the development of a Town Center Commuter Parking and Mixed-Use Project. View a map here.
“The Council spent many hours discussing this complex process with the needs of residents in mind, and I’m pleased to see this day arrive,” said Salim Nice, Deputy Mayor. “This project promises to provide much-needed commuter parking while enhancing our Town Center retail core and creating a new gateway for Mercer Island, just steps away from the future East Link station.”
The property, adjacent to the future Sound Transit Light Rail Station and site of the former Tully’s coffeeshop, also formerly hosted a gasoline service station operated by the Atlantic Richfield Company (ARC). ARC has agreed to reimburse the City for the majority of clean-up costs arising from excavation, segregation, transport and disposal of contaminated soil as part of the redevelopment of the property [more detail available from the prior Nov 14 news release below].
“Redeveloping this property through a public-private partnership without an additional burden on taxpayers, and having clean-up costs covered by the previous owner, is truly a once-in-a-lifetime opportunity for our community to help address its commuter parking needs,” said Councilmember Benson Wong.
When combined with the adjacent portion of Sunset Highway (“Parcel 12”), which the City already owns, and a small portion of WSDOT property, this purchase allows the City’s proposed public-private development project to proceed, with completion targeted for 2023, in advance of East Link’s opening. The project would include: City-owned commuter parking; a performing arts facility in partnership with the Mercer Island Center for the Arts (MICA); and a mixed-use residential and commercial structure based on the City’s Town Center vision and code.
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Nov 14, 2019 – The City of Mercer Island is moving ahead with a property purchase to bring the proposed Town Center Commuter Parking and Mixed-Use Project a step closer to construction.
Last year, the City announced that it was seeking an experienced development team to design and build the project on and near the Tully's site (see map), to consist of City-owned commuter parking, a performing arts facility in partnership with the Mercer Island Center for the Arts (MICA), and a mixed-use residential and commercial structure based on the City’s Town Center vision and code. The property, adjacent to the future Sound Transit Light Rail Station and site of the former Tully’s coffeeshop, also formerly hosted a gasoline service station operated by the Atlantic Richfield Company (ARC).
As a first step, in June 2018, the City Council approved a Purchase and Sale Agreement (PSA) with the sellers of the property. Since then, the City has been actively engaged in due diligence research including extensive environmental assessment of underground contamination on the site, including a portion of Sunset Highway to the north and nearby WSDOT-owned properties.
Following extensive negotiations, a Reimbursement Agreement has been prepared with the known polluter, ARC, which will reimburse the City for the majority of clean-up costs arising from excavation, segregation, transport and disposal of contaminated soil as part of the redevelopment of the property. The environmental consultant estimates the site cleanup will cost between approximately $9 million with redevelopment and approximately $19 million without redevelopment. The City intends to pursue other known funding sources to recover additional site clean-up costs.
At its Tuesday meeting next week (view November 19 meeting documents), staff is recommending that the City Council authorize the Interim City Manager to execute the Reimbursement Agreement with ARC
By year’s end, the City intends to complete the acquisition of the Tully’s site, which when combined with the adjacent portion of Sunset Highway (“Parcel 12”) that the City already owns and a small portion of WSDOT property, will allow the project development to move forward.
The City, MainStreet Property Group (MainStreet), and MICA, are currently negotiating project development terms. MainStreet, in partnership with the City and MICA, intends to complete construction before East Link light rail opens in 2023. If development plans change or negotiations fail, the City may consider alternative uses for the property, but all petroleum contamination will be cleaned up regardless, under the supervision of the appropriate environmental regulatory agencies.
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At its June 18, 2019 meeting, the City Council reviewed a Memorandum of Understanding (MOU) with Mainstreet Property Group. Passing by a vote of 5-2, the non-binding MOU establishes a conceptual deal structure forming the basis for a future Purchase and Sale Agreement, Development Agreement, and other related agreements, targeted for finalization by the end of 2019. In related discussion, the Council also voted 7-0 to terminate a MOU allowing the consideration of Mercerdale Park as the potential future site of the proposed Mercer Island Center for the Arts (MICA), which will instead seek to be a major tenant in the mixed-use facility.
Read Council’s supporting materials (Agenda Bill 5578) or download the Mainstreet MOU from the Document Library. Currently, the City is working on the environmental cleanup plan for the former Tully's property, which was once owned by BP/ARCO.
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On December 17, the City announced that the two project finalists, MainStreet Property Group LLC and Shelter Holdings / Weinstein A+U have agreed to merge both organization’s proposals. As a result of these discussions, MainStreet Property Group will be the developer of the project and Weinstein A+U will join the MainStreet team as the lead Architect and planner. GGLO Design will remain on the MainStreet team as the interior designer for the project.
“We are pleased that MainStreet and Shelter have arrived at this solution. This proposal merges both organizations’ strengths in a manner that benefits all stakeholders as well as the community. Once authorized by the City Council, the entire MainStreet organization looks forward to moving the development process forward with the City and community and deliver the best for Mercer Island,” said Kelly Price, MainStreet’s President.
Rather than review two finalist proposals at a scheduled December 18 meeting, the City Council now plans to review this joint proposal and map out next steps at its January 15, 2019, Council Meeting.
Read full News Release
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On October 31, the City announced the two preliminary finalists competing to develop a commuter parking and mixed-use project in Town Center: MainStreet Property Group LLC and Shelter Holdings / Weinstein A+U. Both teams are composed of strong, well-qualified consultant teams with a proven track record. Initial design concepts from the finalists included space for the Mercer Island Center for the Arts as well as significant parking (up to 150 parking spaces) for the future commuter parking facility.
Comments from the community were very useful and the City continues to welcome comments and questions. The Council is currently scheduled to meet with the finalists on Monday, November 26, 2018.
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Over 100 people attended the City's open house on October 22nd showcasing initial conceptual proposals from the five semi-finalists selected to develop a commuter parking and mixed-use project in Town Center.
Initial comments from the community were very useful and the City welcomes as much ongoing input as possible. Please submit comments using the
Comment on Proposals tab. The presentations delivered that night by each of the semi-finalists have now been posted, use the links below to view each presentation.
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The deadline for RFQ submittal was Friday, October 5, 2018 and the City received nine submittals. The City has completed a first screening of the RFQ submittals. The Evaluation Committee reviewed and selected five firms to move forward as semi-finalists. The semi-finalists were selected based on how strongly they demonstrated their qualifications, a clear understanding of the City’s goals, and an ability to work with local communities as requested in the RFQ.
While the RFQ requested that firms provide their concept for the project, to see what could be feasible on the site, the submitted concepts are only a starting point and may or may not be included in the project. Once a firm is selected, the real work begins to design the project. A “winning” design will be developed over many months with the community being asked to weigh in on the specific features, design elements, and overall aesthetics of the project.
The five semi-finalist firms have been invited to participate in a Community Open House meeting scheduled for Monday, October 22, 2018, from 6:30-8:30 pm, at the Mercer Island Community and Event Center. The community is encouraged to review the proposals and comment on the qualifications and concepts proposed by each of the semi-finalists.
Semi-Finalist Proposals
Imagine Housing
Mainstreet Development Group
Reve Development
Shelter Holdings/Weinstein A+U
Stream Real Estate Partners
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The City’s primary objective for this development is the construction of 100 or more commuter parking spaces to help alleviate pressure on the current Sound Transit-owned Park & Ride garage, that fills by 7:00am on most weekdays. Additional community benefits the City is seeking include:
- Public Open Spaces – An attractive and functional open space and pedestrian/bicycle connection between the project site, Town Center, and the Sound Transit light rail station.
- Well-Designed Integration – A project that integrates and enhances the Greta Hackett Outdoor Sculpture Gallery in the design.
- Arts & Cultural Events and Spaces – Inclusion of arts performances, education and collaboration venues.
- Housing Diversity – The community has a strong interest in adding workforce housing as well as additional condos to the Town Center area.
