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Council MIN 09-05-2013 SpecialFederal Way MINUTES FEDERAL WAY CITY COUNCIL SPECIAL MEETING Council Chambers - City Hall September 5, 2013 6:00 p.m. www.cityoffederalway.com 1. CALL MEETING TO ORDER Mayor Priest called the meeting to order at 6:10 p.m. City Officials present: Mayor Skip Priest, Deputy Mayor Jim Ferrell, Councilmember Kelly Maloney, Councilmember Susan Honda, Councilmember Jeanne Burbidge, Councilmember Bob Celski, Councilmember Diana Noble - Gulliford, and Councilmember Dini Duclos. City Staff present: City Attorney Pat Richardson, and Deputy City Clerk Stephanie Courtney. 2. PRESENTATIONS Presentation of Schematic Design, Updated Cost Estimate and Operational Pro Forma Analysis for the Proposed Performing Arts and Conference Center by Lorax Partners. Community and Economic Development Director Patrick Doherty gave an overview of the project thus far. This included a timeline of the City Center Vision which was adopted in the 1995 Comprehensive Plan. He stated the City Center is the "front door" of the city and is likely the first impression of visitors, potential new business owners, investors, developers, and others. Mr. Doherty further highlighted the results of the 2008 citizens survey; and subsequent feasibility study done in 2009 from Webb Management. He stated in March of this year, the Council authorized schematic design development, updated cost estimate and operational pro forma analysis. He reviewed the financing of the PACC including New Markets Tax Credits (NMTC), Capital Campaign (including naming rights and Grants), and the potential economic impacts of the facility. He stated the on -going impacts (direct and indirect) to the region — Expenditures: $2,537,630/year; Sales: $4,733,750/year; Earnings: $1,304,740/year; and Jobs: 37. Mr. Doherty stated the next steps would include additional public meetings and citizen input on September 17th and September 19th; the Federal Way Coalition of the Performing Arts will continue to seek grants, contributions, and naming rights funding; and upon City Council authorization, the 4 month process of the Land Use Permit Application can be started with an approximate cost of $65,000. City Council Minutes — September S, 2013 Special Meeting Page I of 4 Mr. Doherty introduced PJ Santos of Lorax Partners and Wendy Thompson of LMN Architects. Mr. Santos reviewed the project goals and location of the project. He reviewed the design of the building and how the facility would be situated on the site including the proposed additional hotel. He highlighted artist renderings of the facility with 3 -D drawings from various vantage points. The facility has been designed for a variety of uses to accommodate small to larger functions and is fully equipped with "back of house" including dressing rooms, office, restroom facilities, and kitchen. Wendy Thompson highlighted the Auditorium components design features and the acoustical values of the facility. She also presented 3 -D graphics of the interior of the auditorium, patron room and outside areas. Mr. Santos reviewed the Pro Forma summary including the operating revenue and operating expenses and timeline options. Mr. Doherty introduced Joanne Piquette, President of the Federal Way Coalition of the Performing Arts, who gave a brief update to Council on their fundraising efforts. She was happy to announce they have approximately $500,000 in donations for this project with upcoming events scheduled. She encouraged everyone to attend the rally on November 23rd at Saghalie Middle School where all proceeds will benefit the PACC project. 3. CITIZEN COMMENT H. David Kaplan, spoke in support of a Performing Arts and Conference Center which could be a catalyst to bring more tourism dollars into the city. Byron Hiller, spoke with concerns over the business plan and lack of contingency funds for the project. He asked the city to look carefully at the operating budget. Norma Blanchard, reflected the 2008 city surrey and asked Council if citizens would have the ability to vote on this project. Paul Lew, noted he spoke with staff who was able to answer his questions and concerns with this project initially, he would like to see the project move forward. Julie Vance, stated she was initially hesitant of this project, however supports the Arts and she would like to have a more affordable option than the expense of traveling to Seattle to see a show. Patricia Conant, spoke as a supporter of the arts would like to see a Performing Arts facility in Federal Way, however she is concerned with the potential stress on the city and if it would be financially sustainable. Laura Johnson, spoke in support of the arts and the idea of a Performing Arts facility, however she agrees it seems the budget has holes that she would like the city to look into. Lynda Jenkins, long -time resident of Federal Way spoke in opposition to a Performing Arts and Conference Center in Federal Way. Margaret Nelson spoke in support of a Performing Arts and Conference Center for the reason it will bring more tax revenue into the city and possibly encourage more businesses to come to Federal Way. Carrol Clemens long term city commissioner spoke in support of the PACC and the increased revenue in taxes it could bring. He noted the Aquatic Center and Celebration Park are a huge driver for hotels and restaurants in the area. City Council Minutes — September S, 2013 Special Meeting Page 2 of 4 Tracy Hills, spoke in concern over parking at the proposed facility and if this development would bring any local job opportunities. John Wilde noted he is undecided on this project; he would like to see if there are additional options to consider for example a development similar to Kent Station or a Higher Education facility. He is also concerned with parking issues, and access and safety of nearby businesses. Jim Burbidge, spoke in support of the arts, and supporter of the Performing Arts and Conference Center. He would like to see information regarding potential costs for groups and performers who would use the venue; he would like the Council to make sure it is economically viable to everyone. Vernon Jenkins, opposed the project and is concerned with the availability of parking at this proposed site and proposed adjacent hotel. He also noted the current hotels in the area have vacancy and suggested they might not want more competition. Betty Huff spoke in support of the PACC and noted this project can bring big benefits to the city. Tony Moore, Federal Way School Board President noted he loves the idea of the Performing Arts and Conference Center he agrees with previous commenters that there are holes in the information and operating budget. He would encourage the Council to seek younger input as this is a project that will be a legacy to future generations. Matthew Jarvis thanked the Council for their service to the community and stated as a business owner, he is on the "hook" for his business 'Pro Forma. He is concerned in this situation if the projections and Pro Forma are vastly off, the tax payers are on the hook for the difference or any shortfalls. Allen Nelson spoke in support of the Performing Arts and Conference Center he noted there are cities and there are good cities. He would like to see Federal Way be the type of city that attracts people and continues to grow. With no further citizen comment Mayor Priest facilitated discussion between staff, presenters and Councilmembers. Mr. Doherty also introduced Joe Mcllwain the Director of the Edmonds Performing Arts Center who developed the Pro Forma. Council discussion ensued where Councilmembers asked for various clarifying questions of Mr. Doherty and Mr. Mcllwain. Councilmember.Duclos asked to include neighboring facilities such as Auburn in further reviews and asked when staff would be hired to reflect the revenue projections for the first year. She asked about the use of the Webb report in the budget. Councilmember Noble - Gulliford asked if the employees would be city staff or non - profit and if the payroll taxes and benefits are included in the budget. Mr. Mcllwain stated preferably a non - profit group would be formed and that would run the facility. All employees would be hired from that non - profit; not city employees. He noted there is more freedom and opportunity with that option including fundraising and liquor service at the facility. Deputy Mayor Ferrell questioned if the Pro Forma budget is incorrect and the non - profit that is running the facility fails, who would have to cover the additional funds to keep the facility running. He also noted the salaries of the projected employees of the non - profit seemed low City Council Minutes — September S, 2013 Special Meeting Page 3 of 4 for this region. Councilmember Maloney discussed the Pro Forma numbers and also questioned areas such as the salaries and benefits of the non - profit employees, and advertising budget which both seemed on the low end of market. She additionally asked clarifying questions regarding qualifying for the New Market Tax Credits. Councilmember Celski thanked everyone for the feedback and thanked Mr. Mcllwain for his work on the Pro Forma. He asked about cannibalization of local performing arts venues and if Mr. Mcllwain in his professional opinion, how would he asses this project in regards to being a desirable facility. Mr. Mcllwain stated the size and multi - purpose use of the PACC is very desirable — his location currently utilized a partially renovated property for conference space. Councilmember Honda noted her concern with fundraising donation totals included with the budget and potentially over the local pool of donors. She is also concerned with the use of Lodging Tax dollars and use of capital budget dollars. She is not supportive of using the entire Lodging Tax budget on this project. She would like to see who is responsible for equipment repairs. Councilmember Burbidge thanked staff and the other presenters for their detailed presentations; and thanked for all the community input given on this project. She requested more detail in the areas of the ongoing programing including the balance of activities of the local groups vs. the touring groups. Mr. Doherty and Mcllwain addressed the Council's questions as information is available and stated additional research will be done and brought back to Council. In conclusion, Mayor Priest asked citizens to email or contact the city with any additional questions regarding this project. 4. ADJOURNMENT There being nothing further to come before the City Council, Mayor Priest adjourned the Special Meeting at 9:15pm. Attest: S ep ,hhnie D. Court b4, CIVIC, Depu ity Clerk Approved by Council: September 17, 2013 City Council Minutes — September S, 2013 Special Meeting Page 4 of 4