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FEDRAC PKT 11-09-2004 /1ti.r /if City of Federal Way City CøubcU ' ¥inaöce!Economic DeveloPßl~nt:/I{egiollal Affairs ComlJJ.~t1;e~::, " Tuesday~ November 9, 2004 5:3(lp.m. ' ,:'.'.,City'Hall Hylebos ConferençeRoom AGENDA L CALL TO ORDER 2. PUBLIC COMMENT 3. COMMITTEE BUSINESS A. Approval of the October 12,2004 Minutes B. Discussion of Lifestyle/Retail Market Study Parameters and Possible Outcomes C. Code Amendment to Allow More L T AC Members Action Information Action 4. OTHER 5. FUTURE AGENDA ITEMS 6. NEXT MEETING: FEDRAC - Economic Development: December 14, 2004 FEDRAC: November 23, 2004 Committee Members: Eric Faison. Chair Jeanne Burbidge Jim Ferrell City Staff [wen Wang, Management Services Director Jason Suzaka, Management Analyst (253) 835-250/ C: Islaging\4/897 A8E-3 7DF-OOA CF9Iin\4/897 A8E-37DF-OOACF9.doc 'Finance/Economic Development/Regional Affairs Committee MINUTES Committee Members in Attendance: Chair Eric Faison, Members Jeanne Burbidge and Jim Ferrell. City Council Members in Attendance: Mayor Dean McColgan, Deputy Mayor Linda Kochmar, Councilmembers Jack Dovey and Michael Park. Staff Members in Attendance: Iwen Wang, Management Services Director; David Moseley, City Manager: Amy Jo Pearsall, Assistant City Attorney; Patrick Doherty, Director of Economic Development; Jason Suzaka, Management Analyst. Others in Attendance: H. David Kaplan. I. CALL TO ORDER Chair Eric Faison called the meeting to order at S:3 7 p.m. 2. PUBLIC COMMENT None. 3. COMMITTEE BUSINESS a) Approval of the September 14 and 20,2004 meeting minutes Correction: Added Andy and Lou Cratsenherg to the list of meeting members in attendance to the 9/ f 4/04 minutes. Motion to approve the September 14 and 20, 2004 meeting minutes. Motion seconded and carried. b) Selection of Retail/Lifestyle Center Market Study Consultant Presented by Patrick Doherty A handout was given to the committee staled the scope of work for Leland Consulting. Mr. Doherty reviewed the comparison ofrdail market study consultants with the committee (pages B 1-2). The committee then discussed their views on who would be their choice as consultant. Supporters of Leland noted their proposal of the "whole package" of retail, planning, and development experience, as well as their presentation. Others felt that it would be prudent to perform an analytical market study first b; Hunter, and then decide on what to do alter that. There is also the possibility that the study will drive what happens next. Chair Faison reported A-I that the City had some inquiries in the business community who might be willing to pitch in financially on a study. There was some concern on the Council that the timing of any hiring of a consultant may be perceived as irresponsible spending, especially with the upcoming budget. However, other Council members countered that the project has the support of the business community, and is necessary to help give them a "shot in the arm." A question was raised regarding whether or not capital money (such as REET) can be used to pay for the project. REET money cannot be used for this project unless it is for transportation or parks improvements. However, utility tax money is at the City's discretion, and if the Council decides to designate the money for economic development, that have the ability to do so. The initial $55,000 grant allocation from the 1997 budget is capital fund money designated for the downtown economic redevelopment. Because there was no clear consensus, the committee decided to take no action at this time. Councilmembers are asked to forward any of their ideas to Patrick Doherty. Staff was asked to explore a potential financial partnership with the private sector. Councilmember Park reported that a couple of councilmembers !Tom the City of Lakewood would like to attend the November FEDRAC meeting. 4. OTHER None. 5. FUTURE AGENDA ITEMS 6. NEXT SCHEDULED MEETING , 2004 at 5:30 p.m. in the Hylebos Conference Room. 7. ADJOURN Chair Eric Faison adjourned the meeting at 7: 10pm. Recorded by Jason Suzaka C:\staging\417D~F71-523D-IO5ECB\in\417D~F71 -52_\D-IO5ECBdOG A-2 FIRM Gibbs ::J\ Leland/RTKL Buxton Hunter FEE $25,000 + travel/expenses $42,500 $60,000 = up to $2,000 travel/expenses (after 11/1/04 - $70,000) $15,750 + approx. $3,000 travel/expenses Comparison of Retail Market Study Consultants PROS Retail and planning experience Focus on neourbanist, town-center development Identifies retailers our market could support Would identify what City could do to enhance market forces Would share FW report with "many" retail/developer contacts Lower cost "Whole package" of retail, planning and development experience Detailed review of demographic data - not just census Provide demand for retail, office, limited housing Identifies retailers our market could support Would provide development strategy Included timeline Detailed demographic/psychographic analysis Focused comparison to retailers' criteria Provide market packages for up to 20 retailers Included timeframe - not timeline Retail and planning experience Recognizes "big picture" for FW City Center Detailed demographic analysis - with local info Detailed retail demand/rent/programming analysis Would present FW case to 10 lifestyle center developers Has Federal Way experience Provided timeline with hourly break-down Lowest cost CONS May rely excessively on census data Does not provide "development" services No timeline provided Inclusion of planning services may "fatten"/Iengthen scope Higher cost No planning or lifestyle center orientation Does not provide "development" services May be overly focused on Buxton client list Highest cost Does not provide "development" services FIRM Gibbs Leland/RTKL Buxton ~ ~ Hunter Comparison of Retail Market Study Consultants ANALYSIS COMPONENTS Define Trade Area ID customer base Demographic data from census + buYing patterns ID other major retail centers/competition Factor in traffic, new/proposed projects, etc. Project immediatellong-term growth customer base can support ID retail growth categories + detailed list of potential tenants Use Status Quo, Max Growth models Market Strategy vs. Market Study Site and market reconnaissance ID Trade area Historical and projected economic/demo data (census, Claritas, ESRI-BIS) Competitive supply analysis (incl comparative analysis of projects, stores + interviews) Market demand analysis (incl niche opportunities, anchors + forecast for 5-10 yrs) Development programming (mix of uses, market niches, price/lease, amenities) Development strategy (potential sites, roles, phasing, financing, etc.) Phase / - Retail Trade Area Determination Product demand analysis (ave. annual household purchases against national ave.) Analysis of households (psychographic profiles) Product demand analysis (ave. annual household purchases against national ave.) Phase 11- Retai/ Site Selection and Tenant Analvsis Analyze potential retail center Tenant selection and analysis Analysis of similar retail centers Lifesty/e Center as first step in creating multiuse urban(e) center ID functional trade area (drive time analysis, local area sales, competitive market assessment/mapping) Define demographics and use locally generated info (PSRC), not just census, etc. ID sales support for "lifestyle retailers" in FW trade area (focus on different retailers than mall product) Analyze potential transfer of sales from existing "lifestyle" centers Comparison with analogous projects Nuances: Long-term perspective of regional retail market Access to trade area perspectives from selected retailers Experience with site selection criteria used by critical tenants DELIVERABLES Qualitative opinion on retail opportunities, incl amount of sq. ftge Excess/deficit of existing retail by category List of retail/entertainment bsns as potential new tenants Contact RE brokers, developers, tenants, ICSC Conf, ULI Conf, etc. Includes professional peer review at his expense . Market Reconnaissance Report Competitive Supply Analysis Retail Inventory and Void Analysis Market Demand Analyses (retail, some residtl, employ) Market Positioning Strategy Development Programming for Key Catalyst Projects Map of drive-time trade areas Household psychographic profiles Product demand analysis for drive-time trade area (20 top retailers) Trade area polygons overlaid on map Household profiles compared to retailers' target area profiles Dominant segment household densities Marketing binder Retailer-specific marketing packages (up to 20) Projected sales volumes from FW trade area Supportable retail rents from FW trade area Merchandise programming Key tenant strategies (key retailers) Develop marketing piece for developer solicitation Present to approx. 10 lifestyle center/retail developers CITY OF FEDERAL WAY MEMORANDUM DATE: November 2, 2004 SUBJECT: Finance, Economic Development and Regional Affairs Committee David MOS~anager Patrick Doh~nomic Development Director Code Amendment to Allow Additional L T AC Members TO: VIA: FROM: Policy Question Should the Federal Way City Code (FWCC) be amended to allow more than five Lodging Tax Advisory Committee (L T AC) members? Background The FWCC includes provisions for the City's L T AC, including the number and affiliation of each member. State law (RCW 67.28.1817) provides that the L T AC must include at least five members, constituted as follows: one member who is an elected official of the municipality, at least two members who are representatives of businesses authorized to collect the lodging tax, and at least two members who are persons involved in activities authorized to be funded by lodging tax revenues. (Italics added for emphasis. ) Interestingly, while the language of Section 2-95.2 FWCC ("Membership") is almost identical, it does not include the words "at least" in setting out the L T AC membership, as does State law. As a consequence, the City of Federal Way L T AC is currently limited to five members. Nevertheless, it seems clear that the intent of the FWCC provisions was to allow for periodic review and change to the L T AC membership, given that Section 2-95.5 ("Changes to membership") provides the following language: The council may review the membership of the committee annually, and make such changes as the council may deem appropriate. The total number of members may be increased or decreased at the time of the annual review, by motion of the council duly adopted, but the number of members shall not be less than five. Gl FEDRAC memo LTAC Changes 11/2/04 Page 2 of2 Proposal Option 1. Add the words "at least" before the numbers and affiliations of the L T AC members, in accord with State RCW language, in Section 2-95.2 FWCc. In addition, the following sentence is added to Section 2-95.2 to clarify that any addition of L T AC members must occur in pairs of one representative from the lodging industry and one representative from tourism activities, as per State RCW language. Please see attached draft code amendment for exact wording. Pros: In this way, the L T AC membership may be revised upwards or downwards by City Council, upon its review, in concert with Section 2-95.5. This is especially useful when L T AC membership recruitment yields several qualified candidates. Cons: No clear negative consequences. Option 2. Leave the FWCC language unchanged. Pros: Maintains a smaller, streamlined group. Cons: Does not provide flexibility to increase public participation in the L T AC membership as public interest increases. L T AC Recommendation. Approve Option 1. Committee Recommendation Forward Option - to the full City Council for approval on December 7,2004. APPROVAL BY COMMITTEE: 'Committee Member Committee Member 'ç7- ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF FEDERAL WAY, WASHINGTON, AMENDING CHAPTER 2 OF THE FEDERAL WAY CITY CODE BY AMENDING SECTION 2-95.2 TO ALLOW MORE THAN FIVE MEMBERS ON THE LODGING TAX ADVISORY COMMITTEE. WHEREAS, RCW 67.28.180, authorizes local jurisdictions to levy and collect a special excise tax not to exceed two percent on the sale of or charge made for the furnishing of lodging by a hotel, rooming house, tourist court, motel, trailer camp, and the granting of any similar license to use real property for the purposes of tourism promotion, and/or acquisition or operation of tourism-related facilities; and WHEREAS, RCW 67.28.1817 requires that a municipality with a population of five thousand or more that imposes a lodging tax must establish a lodging tax advisory committee comprised of at least five members appointed by the legislative body of the municipality; and WHEREAS, RCW 67.28.1817 requires that a lodging tax advisory committee include one member who is an elected official of the municipality, at least two members who are representatives of businesses authorized to collect the lodging tax, and at least two members who are persons involved in activities authorized to be funded by lodging tax revenues; and WHEREAS, Section 2-95.1 FWCC creates the City of Federal Way Lodging Tax Advisory Committee, in accord with Chapter 67.28, RCW; and WHEREAS, Section 2-95.2 FWCC limits the lodging tax advisory committee to five members only; and ORD# , PAGE 1 C3 WHEREAS, the City of Federal Way Lodging Tax Advisory Committee at its September 10, 2004 meeting voted unanimously to allow for expansion of the committee's membership to up to seven members, by adding one member who is a representative of businesses authorized to collect the lodging tax and one member who is a person involved in activities authorized to be funded by the lodging tax revenues; and WHEREAS, the City Council wishes to expand the membership of the lodging tax advisory committee to encourage greater community participation in committee activities and increase the number of committee members able to work on committee projects and programs; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY, WASHINGTON, DOES HEREBY ORDAIN AS FOLLOWS: Section 1. Chapter 2, Article III, Division 7, Section 2-95.2 ofthe Federal Way City Code is amended, as follows: 2-95.2 Membership The membership of the lodging tax advisory committee shall be appointed by the city council and shall consist of at least five members: one member shall be an elected official of the city who shall serve as the chair; at least two members shall be representatives of businesses required to collect the tax, and at least two members shall be persons involved in activities authorized to be funded by revenue received from the tax. The number of members who are representatives of businesses required to collect tax under this chapter ORD# , PAGE 2 ctj shall equal the number of members who are involved in activities authorized to be funded by revenue received under this chapter. Section 2. Severability. The provisions of this ordinance are declared separate and severable. The invalidity of any clause, sentence, paragraph, subdivision, section, or portion of this ordinance or the invalidity of the application thereof to any person or circumstance, shall not affect the validity of the remainder of the ordinance, or the validity of its application to other persons or circumstances. Section 3. Ratification. Any act consistent with the authority and prior to the effective date of this ordinance is hereby ratified and affirmed. Section 4. Effective Date. This ordinance shall take effect and be in force five (5) days from the time of its final passage, as provided by law. PASSED by the City Council of the City of Federal Way this ,2004. day of CITY OF FEDERAL WAY MA YOR, DEAN MCCOLGAN ATTEST: CITY CLERK, N. CHRISTINE GREEN, CMC ORD# ,PAGE 3 C5 APPROVED AS TO FORM: CITY ATTORNEY, PATRICIA RICHARDSON FILED WITH THE CITY CLERK: PASSED BY THE CITY COUNCIL: PUBLISHED: EFFECTIVE DATE: ORDINANCE NO. K:\ord i nance\lodgi ngtaxordchanges. doc ORD# , PAGE 4 w