Commuter Parking Development - Background Information

The City entered into a Settlement Agreement with Sound Transit on October 17, 2017 which provides $10.05 million toward projects to offset the impacts of the East Link light rail project. Included amongst those projects is $4.41 million to fund long-term regional transit commuter parking projects near the new Light Rail Station in Town Center. Upon execution of the Settlement Agreement, the City began working on plans to acquire and develop long-term regional transit commuter parking.

Section 6 of the Sound Transit Settlement Agreement describes the 49/51 percent cost-share model related to the commuter parking project. Specifically, the Settlement Agreement will cover 49% of the costs for the commuter parking project and the City will cover 51%. The City’s 51% portion of the project contribution is intended to be achieved through a property match. Property Assemblage The Commuter Parking Project site consists of three different parcels acquired and assembled over multiple years to provide commuter parking in Town Center. The parcels include:

• The “former Tully’s Site,” acquired in 2019, which includes the former coffee shop building and the associated parking lot.
• Parcel A-1, which is owned by the City under a turnback agreement with the Washington State Department of Transportation from 2000. This parcel includes a portion of Sunset Highway and the cul-de-sac to the north of the former Tully’s property.
• Parcel A-2, acquired in 2021, which is north of and immediately adjacent to Parcel A-1 and is part of what is known as the Greta Hackett Outdoor Sculpture Gallery in Aubrey Davis Park.

The total property assemblage is just over 31,000 square feet and represents an important gateway to Town Center.

At its meeting on June 5, 2018, the City Council authorized the City Manager to execute a Purchase and Sale Agreement to acquire the former Tully’s property, located at 7810 SE 27th Street, with the intent of combining this property with Parcel A-1 for the purpose of providing commuter parking. The former Tully’s property acquisition was completed in 2019 with a final purchase price of $2 million dollars. REET 1 funds were used for the acquisition. The City also purchased Parcel A-2 in December 2021 for $668,000 using REET 1 funds (see AB 5996).

As part of the due diligence period and prior to finalizing the purchase of the former Tully’s Property, the City conducted an environmental site investigation due to the known soil contamination on the property. This due diligence period included an investigation to determine the vertical and horizontal extent of the contamination and to engage in negotiations with the former owner (ARC) responsible for the contamination from the former gas station on the property (BP/ARCO). A settlement agreement was executed in November 2019 between the City and ARC formalizing ARC’s responsibility to reimburse the City for costs related to site contamination investigation and cleanup. This includes 90% of costs arising from environmental investigation and assessment; 85% of costs arising from remediation of soil gas and groundwater contamination; and 100% of costs from excavation and disposal of contaminated soil at the former Tully’s Property and 75% of these costs at the A-1 parcel.

The former Tully’s Coffee shop building and the associated parking lot are in poor condition. The parking lot does not meet City code and the building is stripped and inoperable. Most components of the building have failed or are at the end of their useful life. The building is currently used as transitional storage due to the City Hall closure – staff are working on cleaning out and fully abandoning the building. The building was under consideration for use as a satellite City facility, but the building is sited poorly and prevents efficient use of the property. Additionally, estimated costs to repair the building exceed the cost of replacement.