04-06-2021 Council Packet - SpecialApril 6, 2021
Sound Transit Board
401 S Jackson Street
Seattle, Washington 98104
Re: Operations and Maintenance Facility — South Draft Environmental Impact Statement
Dear Sound Transit Board Members,
The City of Federal Way's Mayor and Councilmembers have reviewed the findings of the Draft
Environmental Impact Statement (DEIS)-of the potential sites for the Operations and Maintenance Facility
South (OMF-South), conducted a Council Study Session with Sound Transit staff, have heard from our
community, and have reviewed technical comments prepared by City staff. Our review has affirmed our
belief that the Midway Landfill needs to be identified as the preferred alternative and ultimately be the
site selected for this facility and the two Federal Way sites should be removed from further review.
We recognize that Sound Transit is building new transit infrastructure to support sustainable growth in
our region. In doing so, Sound Transit should not make a decision that will have a lasting negative impact.
Environmental review by way of NEPA and SEPA was implemented at the Federal and State levels to
evaluate the impacts of government decisions in orderto prevent them from causing unnecessary impacts
to communities like those that the OMF-South will have in Federal Way. The 336th Street site will remove
a church, a school, and a daycare that serve our community as well as residences and other businesses.
The 344th Site will remove multiple churches, 20 residences, and a dozen businesses, including the Garage
Town community that the DEIS presents as a single business but is in fact made up of over 60 unique
owners and Ellenos Real Greek Yogurt, who recently invested millions of dollars in improvements to their
regional and growing business. The Midway Landfill will displace significantly fewer businesses and
employees, no residents, and no civic institutions.
The DEIS presents a clear preferred alternative when the impacts are considered and it is the Midway
Landfill. In accordance with NEPA and SEPA, cost is not an Environmental Impact, however the prepared
DEIS clearly shows that Sound Transit has elected to include costs within the decision matrix. In
considering the overall impacts and a robust environmental review process, cost cannot be a factor in
your decision, the impacts to the Federal Way sites are significant and will be far too detrimental to our
community.
The DEIS overtly assumes that the City of Federal Way will approve vacating public roads, that City staff
will modify our Development Standards to permit this development that would not be approved of other
public or private developers, or that adequate mitigation to these items could be found. We strongly
object to Sound Transit's finding of regulatory certainty on behalf of the Federal Way sites by unilaterally
Page 2
April 6, 2021
and assuming City approval. Additionally, Sound Transit does not have adequate authority to commit the
City of Federal Way to a future legislative act in vacation of opened and utilized public right-of-way.
The City and Sound Transit have a shared interest in the success of the light rail system and have enjoyed
a successful partnership on the Federal Way Link Extension to date. We have seen and heard from Sound
Transit a willingness to look to the future and make the decisions that are in the best interest for the
future of this region. In this spirit, we ask that the Sound Transit Board remove the two Federal Way
locations and select the Midway Landfill as the preferred alternative and site of the new OMF-South.
City staff will provide additional technical comments under separate cover.
Sincerely,
Jim Ferrell, Mayor
Lydia Assefa-Dawson, Councilmember
Huang V. Tran, Councilmember
Martin A. Moore, Councilmember
CC: Peter Rogoff, CEO, Sound Transit
EJ Walsh, P.E., Public Works Director
Brian Davis, Community Development Director
Ryan Medlen, Sound Transit Liaison
Susan Honda, Council President
Gregory Baruso, Councilmember
Leandra Craft, Councilmember
Linda Kochmar, Councilmember
CITY OF FEDERAL WAY
MEMORANDUM
DATE: April 6, 2021
TO: City Council
VIA: Jim Ferrell, Mayor
FROM: EJ Walsh, P.E., Public Works Director
Ryan Medlen, Sound Transit Liaison
SUBJECT: Sound Transit OMF-South Study Session
FINANCIAL IMPACTS:
There are no current Financial Impacts. Dependent on the final location of the OMF Facility
there may be future Financial Impacts to the City.
BACKGROUND INFORMATION:
The first part of the study session will be a presentation by the Financial Consulting Services
Group (FCS Group). FCS Group was contracted by the City to provide an independent
assessment of the overall economic impact to the City of the OMF-South for each of the sites.
They will present their findings from their analysis for the Federal Way site alternatives and
evaluated potential impacts. Their original report, attached, was previously provided to Council,
and was based on earlier OMF-South footprints prior to publication of the Draft Environmental
Impact Statement (DEIS). Staff is currently working with the FCS Group to evaluate related
opportunity cost impacts, that is what is the potential development opportunities that are lost if
this project moves forward.
The second part of the study session will be by City staff to provide an update on the review of
the OMF-South Draft Environmental Impact Statement. Summary technical comments to date
will be presented for the Council's information. These comments will be incorporated into a
formal comment letter that will be prepared by staff and sent to Sound Transit as part of the
OMF-South comment review cycle. April 6th is the last Council date prior to the close of the
public comment period, which ends on April 19th
While staff is still reviewing and drafting a formal technical review memo to Sound Transit, the
following are some key findings that have arisen:
• Cost is not an environmental impact and should not be a part of the EIS publication. Even
if it were, the DEIS contains inadequate information regarding the cost of each of the
alternatives for the emphasis it has been given.
• Both Federal Way site alternatives propose the vacation of improved public right-of-way,
April 6, 2021
Sound Transit OMF — South Study Session
Page 2
which is a discretionary legislative action by City Council.
• Neither Federal Way site alternative meets City Development Standards or mitigates
impacts to the public road network.
• The section discussing cumulative impacts need to consider additional elements:
o The Commercial Enterprise zone will be impacted by both Tacoma Dome Link
Extension and by the OMF-South.
o The facility supports the region and may provide support other link extensions,
beyond those operating in Federal Way.
• Staff has concerns about land use compatibility mitigation and that code requirements
will be unmet as the design progresses.
• At the 344th St. site, the economic benefits of the OMF-South jobs added have less
impact when the economic impacts are considered.
• While staff agrees that light rail is consistent with our comprehensive plan, there are
some policies identified in the DEIS that either do not apply or require additional context.
The above findings highlight select comments that staff have noted in their review of the DEIS.
Additional Endings are certain to arise as the review is completed. This information will be
compiled into a formal review letter and sent to Sound Transit as part of the DEIS comment
period.
Public comment will be accepted at the Study Session, but it is recommended that people also
submit their comments direct to Sound Transit so that they can be entered into the environmental
record and addressed in the Final Environmental Impact Statement for the project.
Sound Transit is the lead agency for environmental review pursuant to RCW 43.21 c and WAC
197-11 (SEPA). For any Federal environmental review, the Federal Transit Authority will be
lead agency (NEPA). The DEIS is available for public review located at either of the following
websites:
• https://omfsouth.participate.online/
• https://www.soundtransit.org_/get-to-know-us/documents-reports/operations-maintenance-
facility-south-draft-environmental-impact
Staff has also been informed that formal comments can be submitted anytime during the
comment period through the following channels:
April 6, 2021
Sound Transit OMF — South Study Session
Page 3
Email: omfsouthDEIS(c�r�,soundtransit.org
Mail: OMF South Project, c/o Hussein Rehmat
Sound Transit
401 S. Jackson St.
Seattle, WA 98104-2826
Phone: 206-257-2135
Online comment form: http://omfsouth.12articipate.online
Attachment
FCS Group Memo, Sound Transit OMF Site Impact Assessment
•:;> FCS GROUP
Solutions -Oriented Consulting Memorandum
To: EJ Walsh and Ryan Medlen Date: April 13, 2020
City of Federal Way
From: Gordon Wilson fsw4n (v,7��
Todd Chase
Tim Wood
FCS GROUP
RE Sound Transit OMF Site Impact Assessment
INTRODUCTION
As Sound Transit expands its light rail network throughout the region, it has identified the need for a
new regional Operations and Maintenance Facility (OMF) to store and maintain its growing fleet of
vehicles. The agency has determined that an OMF should be located to the south of Sea-Tac
International Airport as the network expands towards Tacoma. Sound Transit has pared down an
initial list of candidate sites to three, including one on a landfill site in Kent and two potential sites in
Federal Way.
The City of Federal Way contracted with FCS GROUP to analyze the potential economic impacts of
the two Federal Way sites. Accomplishing this task requires an in-depth analysis and comparison of
both OMF sites with regard to land area requirements, existing uses, assessed property and
improvement valuations, population/dwellings and business employment.
SITE DESCRIPTIONS
For the purposes of this analysis, we evaluated the two Federal Way sites but not the site in Kent.
The two sites in Federal Way are adjacent to one another, located between Pacific Highway and
Interstate 5 in the Kitts Corner area of the City (see the site map on Exhibit 1). There is an 11.19-
acre area which is a part of both proposed sites consisting of warehouses, vacant industrial
properties, and residential development.
The two sites are as follows:
• Christian Faith Center (CFC) Site: is a 53.36-acre northernmost site which is primarily owned
by the Christian Faith Center, including a large church, school and community facility. The CFC
owns 80% of the site, the remainder includes the 11.19-acre shared area mentioned above. This
site will be referred to as the CFC site in this study.
• 344t' Street Site: is a 50.31-acre site south of the CFC site. Existing uses are primarily industrial
and commercial, with some single family residential, spread across 52 separate parcels with a
southern boundary along South 344th Street. The site includes the 11.19-acre shared area
mentioned above.
Throughout this analysis, comparisons of various metrics will be drawn between each site, including
the 11.19 acres shared by both sites. Where data is available for the shared 11.19 acres, impacts will
be shown for the shared area but not deducted from either the 344th site or the CFC site.
Finn Headquarters Locations page 1
Redmond Town Center Washington 1425.867.1802
75251661h Ave NE, Ste D-215 Oregon 1503.841.6543
Redmond, Washington 98052 Colorado 1719.284.9168
April 2020
City of Federal Way
Sound Transit OMF Site Impact Assessment
Exhibit 1: Site Map by Tax Lot
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344th Site Parcels
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FCS GROUP Memorandum
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The site boundaries are based on preliminary information provided to the City by Sound Transit
during the environmental review process. The exact boundaries are subject to change by Sound
Transit.
���> F C S GRDUP page 2
April 2020
City of Federal Way FCS GROUP Memorandum
Sound Transit OMF Site Impact Assessment
REVENUE ASSUMPTIONS AND SOURCES
To assess the potential impact on City taxes, charges and fees, we made the following assumptions.
• Property Tax Revenue: Taxable property values for each OMF siting scenario was based on
data from the King County Assessor's office for each area. We assume that the OMF will be tax-
exempt public property. Current property tax millage rates were applied to the taxable value in
each area to calculate the potential loss of property tax revenue.
• Local Retail Sales Tax: Retail sales reports from ESRI Business Analyst Online and Dunn &
Bradstreet were used to identify taxable sales within the potential OMF sites. Annualized retail
sales figures were multiplied by the City's current local sales tax rate (0.85%) to determine sales
tax revenue impact in the event businesses are relocated from the OMF sites and the City.
• Because of limitations in the granularity of the ESRI database, we did not try to separate
taxable sales between the shared area and exclusive area for each site. We just report data for
each site as a whole.
• State Shared Revenues: This group of revenues is distributed by the State to cities based on
population. In this analysis, the revenue estimates are the per -capita distribution multiplied by the
number of people residing in each site. The Washington Municipal Research and Service Center
(MRSC) provides per -capita distribution estimates for each type of State shared revenue.
Following are the types of State shared revenues and the MRSC estimated distribution per capita:
• Liquor Excise Tax: $5.49 per resident.
• Liquor Control Board Profits: $8.02 per resident.
• Motor Vehicle Fuel Tax (base): $20.06 per resident.
• Motor Vehicle Fuel Tax (increase): $1.19 per resident.
• Multi -Modal Transportation Tax: $1.36 per resident.
• Criminal Justice Distribution: $1.43 per resident.
• Criminal Justice Sales Tax: This increment of sales tax is distributed by the County based on
population. The City budget shows 2020 revenue of $2,818,399 and an estimated population of
96,690, which implies a revenue of $29.15 per capita.
• Surface Water Fees: Based on a 2018 FCS GROUP rate study, impervious surface area data was
obtained for each customer in the 344t' and CFC areas and converted to equivalent service units,
which were then multiplied by the 2020 City surface water utility fee ($99.65 per year). This
revenue is used to manage the City surface water system and is not available for general City
operations such as transportation, police, or parks.
FISCAL CHARACTERISTICS OF POTENTIAL OMF SITES
Population -Based Revenue
ESRI Business Analyst Online provides population and other data for specified areas. However, for
population —as with taxable sales —there are limitations in the granularity of the ESRI database. So
we did not try to separate the population data between the shared area and exclusive area for each
site. We just report data for each site as a whole.
���> FCS GRDUP page 3
April 2020
City of Federal Way
Sound Transit OMF Site Impact Assessment
Exhibit 2 shows 2019 population of 74 in the 344' site and 18 in the CFC site.
Exhibit 2: Population by Site (2019)
FCS GROUP Memorandum
These population figures are used to determine the impact on state shared revenues and the Criminal
Justice Sales Tax, which are all distributed based on population. The total estimate of annual
population -based revenue is shown in Exhibit 3 for both areas.
Exhibit 3: Annual Population -Based Revenues by Site (2020 estimate)
Property Taxes
Population -Based Revenue by Area (2020)
344th Footprint
CFC Footprint 1
$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000
■ Motor Vehicle Fuel Tax ■ Increased MVFT i Liquor Profits
■ Liquor Fxeise ■ Multi -Modal Distrihution ■ Criminal Justice Sales Tax
■ Criminal Justice
Source: ES R I Business Analyst Online, 2020 MRSC Budget Suggestions Guide
Development of a public OMF would result in a loss of taxable property value and related revenue.
City staff provided tax lot information for parcels in the 344' and CFC sites, including data on
existing uses, taxable value and acreage. Taxable property value is shown in Exhibit 4. It is much
higher for the 3441h footprint due to the tax-exempt status of the Christian Faith Center. Most of the
taxable value in the CFC footprint ($8 million) comes from the area shared by both sites ($7.6
million).
F C S GRDUP page 4
April 2020
City of Federal Way
Sound Transit OMF Site Impact Assessment
Exhibit 4: Taxable Property Values (2019)
FCS GROUP Memorandum
Taxable property value drives property tax revenues. Figures shown above are used in conjunction
with property mil rates shown in Exhibit 5 to determine overall property tax impacts for each site.
Exhibit 5: Property Tax Rates by District (2019)
School
$3.63
Sound Transit
$0.21
City
$0.97
Flood
$0.10
Port District
$0.12
EMS
$0.22
County
$1.22
Library
$0.37
State School Fund
$2.63
Fire
$1.77
Source: Kinp County Mil Rates for Parcel #212104-9033
Exhibit 6 shows annual property tax revenue to all taxing jurisdictions, including the school district,
the State School Fund, City, County, South King Fire and Rescue, and other local governments. The
total annual revenue from the 344th Site ($550,000 per year) is much larger than from the CFC Site
($91,000 per year). As was noted above, the property value in the CFC Site is primarily in the area
shared by both sites; only about $5,500 per year in property tax revenue comes from the remainder of
the CFC Site. Property tax revenue to the City alone is also significantly higher from the 344th Site
($48,000 per year) than from the CFC Site (less than $8,000 per year).
Exhibit 6: Property Tax Revenues by District by Area (2019)
Property Taxes by Area (2019)
344th Footprint
CFC Footprint min
Shared Footprint min
$0 $100,000
■ School City
■ Sound Transit ■ Flood
Source: King County Assessor
•:;> FCS GRDUP
$200,000 $300,000 $400,000
■ Port District ■ County
■ EMS ■ Library
$500,000 $600,000
■ State School Fund
■ Fire
page 5
April 2020
City of Federal Way FCS GROUP Memorandum
Sound Transit OMF Site Impact Assessment
Sales Taxes
Taxable sales estimates were provided by ESRI and Dunn & Bradstreet for each site. As shown in
Exhibit 7, the 344th Site has about twice the retail sales as the CFC Site.
Exhibit 7: Estimated Taxable Sales (2019)
Applying current (2020) retail sales tax rates obtained from the Washington State Department of
Revenue, state and local sales tax revenues were estimated from both sites (Exhibit 8). Local sales
taxes collected in the 344' Site are estimated at just over $160,000 while those collected in the CFC
Site total about $80,000.
344th
CFC
Exhibit 8: Estimated Sales Tax Revenues (2019)
Sales Taxes by Area (2019)
$161,938
$0 $20,000 $40,000 $60,000 $80,000$100,000$120,000$140,000$160,000$180,000
Source: ESRI Business Analyst Online, Washington Department of Revenue
4*4 FCS GROUP page 6
April 2020
City of Federal Way FCS GROUP Memorandum
Sound Transit OMF Site Impact Assessment
Surface Water Fees
The Surface Water Management utility administered by the City of Federal Way is funded by user
fees charged to residents and businesses. The City's 2020 surface water management fee (excluding
the City utility tax) was $99.65 per year per equivalent service unit (ESU). Using data from a recent
FCS GROUP rate study, ESUs are as follows: 344th Site (407), CFC Site (302), and shared area (54).
This resulting annual fee revenues shown in Exhibit 9.
Exhibit 9: Estimated Surface Water Management Fees (2019)
The 344th Site currently generates about $10,000 per year more in surface water fee revenue than the
CFC Site. Estimates of the OMF impervious surface area are not available at this time; however, an
OMF could have somewhat more impervious surface area and increase the number of surface water
ESUs, regardless of which site is chosen. Any increased revenue would be dedicated to management
of the City surface water system, not available for general City operations.
Utility Taxes
Due to a lack of utility charge information related to cable, TV, electric, gas, phone and solid waste,
only a partial analysis of utility tax revenue was completed. We estimated utility tax revenue related
to surface water management, water and sewer. Based on those calculations, differences between the
two sites are negligible. Surface water utility taxes are higher for the 344' Site, but water and sewer
utility taxes are higher for the CFC Site. This is due to land use differences between the two sites —
there are several warehouses in the 344th Site, while the Christian Faith Center building is large and
uses more water and sewer. Lacking an estimate of utility usage for the OMF, we cannot determine
whether City utility tax revenue would go up or down as a result of OMF development.
Summary of Revenue Impact
Exhibit 10 shows that both sites have a revenue impact on the City of Federal Way, with the 344'
Site impact larger than that of the CFC Site. The figures are expressed in both annual and biennial
dollars. Most of the revenue for general City operations comes from property and sales taxes. While
an OMF may generate some increased revenue from dedicated surface water fees and possibly utility
taxes, it would not generate taxable sales directly, nor would it generate property tax revenue. That
would represent a revenue loss to the City, the Federal Way School District, and South King Fire
Rescue —three local jurisdictions that provide services mainly to the Federal Way community.
���> FCS GRDUP page 7
April 2020
City of Federal Way
Sound Transit OMF Site Impact Assessment
344th Footprint
CFC Footprint
Shared '
Footprint
Exhibit 10: At -Risk Revenues
Total City Revenue by Area (2020)
N
FCS GROUP Memorandum
$0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000
■ Property Tax Revenue ■ Sales Tax Revenue
■ Surface Water Management Fees State Shared Revenue
Source: Prior Tables
Annual Revenue Impact:
State Shared Revenue
N/A
$1,201
$4,936
ProperlyTax Revenue
$7,376
$7,850
$47,597
Sales Tax Revenue
N/A
$79,170
$161,938
Subtotal City General/Transportation Revenue
$7,376
$88,220
$214,470
Surface Water Management Fees
$5,421
$30,097
$40,552
Subtotal City Revenue
$12,797
$118,317
$255,022
Federal WaySchool District PropertyTax Revenue
$27,496
$29,265
$177,438
South King Fire & Rescue PropertyTax Revenue
$13,438
$14,303
$86,719
Subtotal Schools and Fire Service
$40,934
$43,568
$264,157
Total Federal Way Government Services
$53,731
$161,885
$519,179
Biennial Revenue Impact:
State Shared Revenue
N/A
$2,401
$9,872
PropertyTax Revenue
$14,751
$15,700
$95,193
Sales Tax Revenue
N/A
$158,339
$323,875
Subtotal City General(fransportation Revenue
$14,751
$176,441
$428,940
Surface Water Management Fees
$10,842
$60,194
$81,105
Subtotal City Revenue
$25,593
$236,634
$510,045
Federal WaySchool District PropertyTax Revenue
$54,992
$58,531
$354,876
South King Fire & Rescue PropertyTax Revenue
$26,876
$28,605
$173,437
Subtotal Schools and Fire Service
$81,868
$87,136
$528,313
Total Federal WayGovernmentServices
$107,461
$323,770
$1,038,358
���> FCS GRDUP page 8
April 2020
City of Federal Way FCS GROUP Memorandum
Sound Transit OMF Site Impact Assessment
OTHER IMPACTS
In this evaluation, there are impacts which may not directly affect the City budget but do provide
further context regarding each site.
Employment Impacts
Jobs data was provided by ESRI and Dunn and Bradstreet for each of the focus areas. Current
estimated employment in the 344t' Site included 320 jobs in 2019, while employment in the CFC Site
includes 228 jobs.
Using IMPLAN, an economic impact modeling software program, we were able to estimate direct
impacts within each area and indirect/induced economic impacts within King County. Exhibit 11
summarizes the annual economic impact attributed to the 344t'' Site and Exhibit 12 provides the
economic impact attributed to the CFC Site.
These tables start with the direct employment figure in the top left, and then the implications extend
both downward and to the right. The leftmost data column, "Employment," simply refers to the
number of people employed. Looking to the right, "Labor Income" refers to the total wages and
benefits received by those employees. The next column, "Total Value Added," is a composite figure
that incorporates employee compensation, proprietary income and rents, and taxes paid by businesses
and residents. Value Added is analogous to gross domestic product (GDP) for a given area. The last
column, "Output," is equivalent to total sales.
Starting at the top row of the tables and looking downward, the economic activity in the potential
OMF sites has an effect on a broader area —in this case, King County. The "indirect effect" results
from business -to -business sales. The "induced effect" is the multiplier impact from the re -spending
of income (mostly labor income) from both direct and indirect sources. The indirect effect and
induced effect is a countywide impact —not necessarily within Federal Way or within the site
boundaries.
Exhibit 11: Annual Economic Impact of Employment in the 344" Site
344th Site
Labor Labor Income
Total Value
Value Added
Impact Type
Employment Income perJob
Added
perJob Ou tputi
Direct Effect
320 $24,734,639 $77,296
$39,605,517
$123,767 $66,424,844
Indirect Effect
103 $8,496,341
$13,586,879
$20,666,082
Induced Effect
100 $6,273,009
$11,217,260
$17,010,601
Total Effect
523 $39,503,989
$64,409,656
$104,101,527
Source: IMPLAN, ESRI Business Locator (December 2019 estimates); compiled by FCS GROUP.
Employment in the 344t' Site includes industrial and automotive repair industries which tend to be
relatively high paying (shown in the "Labor Income" column) and have a relatively high output, a
measure of sales. Looking rightward along the top row, the average direct labor income (both wages
and employee benefits) within the 344t'' Site is just over $77,000 per job. Existing jobs within the
344t'' Site are responsible for nearly $40 million in annual value added (or gross domestic product),
or nearly $124,000 in GDP per job. Looking downward in the table, the 320 jobs within the 344t'' Site
are responsible for leveraging 103 indirect (business to business sales impact) and 50 induced jobs
(multiplier impact from re -spending of labor income) within King County.
���> FCS GRDUP page 9
April 2020
City of Federal Way
Sound Transit OMF Site Impact Assessment
FCS GROUP Memorandum
Exhibit 12: Annual Economic Impact of Employment of the CFC Site
Direct Effect 228 $14,498,888
$63,592 $7,561,880
$33,166 $15,595,301
I ndirect Effect 31 $2,240,602
$4,245,302
$6,347,013
Induced Effect 50 $3,125,759
$5,584,036
$8,474,175
Total Effect 309 $19,865,249
$17,391,218
$30,416,489
Source: IMPLAN, ESRI Business Locator (December 2019 estimates); compiled by FCS GROUP
Jobs within the CFC Site are primarily concentrated in the "education and religious organizations"
classification. The average compensation for jobs in the CFC Site is $63,500, about $14,000 less than
the 344' Site. Output and value added (or GDP) stemming from CFC Site employment are also
relatively low, since neither the church nor the school pay taxes, and they do not generate much in
the way of sales. Also, in calculating the GDP for the CFC Site, the IMPLAN model treats donations
to the church from people outside of the site boundaries as a "negative profit" or outside subsidy, so
that the CFC Site GDP of $7.6 million is actually less than the total labor income of $14.5 million.
This does not imply that churches and schools have no value to a community. Clearly they do, but
much of their benefit is outside the realm of this economic analysis.
According to Sound Transit, the OMF will generate about 300 direct jobs, expected to be relatively
high wage. This is less employment than the 344th Street Site but more than the CFC Site.
Vacant Developable Properties
Significant vacant properties are present in both sites. There are six vacant properties in the 344th
site, with a total of 7.25 vacant acres, the majority of which are zoned for industrial development. As
discussed above, industrial employment tends to have a positive impact on the local economy,
especially as it relates to wages paid to workers.
The CFC footprint has a total of four vacant parcels with 22.85 acres spread across industrial,
commercial and multi -family zoning. Of that total, 19 acres are in a single vacant parcel zoned multi-
family, which represents an opportunity to develop dense workforce housing in Federal Way.
However, that parcel is owned by the Christian Faith Center and is currently being used as a parking
lot which could complicate any potential development moving forward.
The City may wish to consider the potential opportunity cost (foregone future property tax and sales
tax revenues) associated with a reduction in buildable employment and housing areas.
SUMMARY OF FINDINGS
There are two types of comparisons that can be made with this analysis. The two sites can be
compared with each other, and either site can be compared with a potential Sound Transit
development of an Operations and Maintenance Facility.
Comparing the Two Sites with Each Other
The first comparison yields the clearest result, because the available data was more complete.
Developing the OMF on the 344th Street Site would have a more negative revenue and employment
impact to the City, school district, and fire district than it would on the CFC Site.
���> FCS GRDUP page 10
April 2020
City of Federal Way
Sound Transit OMF Site Impact Assessment
FCS GROUP Memorandum
Comparing the 344t" Street Site with Potential OMF
This comparison is limited at this time due to lack of data available to FCS GROUP about a potential
Sound Transit OMF development. The following comparison includes two key assumptions: an OMF
would be tax-exempt, and Sound Transit estimates that it would bring about 300 relatively high -
paying jobs.
• Simply because Sound Transit is tax-exempt, would not directly generate retail sales, and would
not have a residential population, there would be an estimated annual loss of about $214,000 in
general City operating revenue (or $428,000 in a two-year budget) and an additional revenue loss
to the Federal Way School District and South King Fire & Rescue of about $264,000 per year.
• Sound Transit has not provided an estimate of impervious surface area for an OMF, but it is
reasonable to assume that its impervious area could be somewhat higher than that of current
properties, if for no other reason than the fact that the site would be fully developed, whereas
right now there are undeveloped parcels. If this is the case, development of the OMF could result
in increased surface water fee income. However, the amount of additional surface water revenue
is not known, and this revenue is dedicated for the surface water system and cannot be used for
general City operations such as roads or policing.
• The City has two kinds of revenues based on population: State shared revenues and Criminal
Justice Sales Tax revenue. Because the existing population in the 344' Street Site is low, the
amount of revenue at risk is very small if an OMF is developed in place of the existing
residences.
• City utility taxes are 7.75% of a given utility's gross local income, and utility taxes are a
significant revenue line item for the City. However, no data is available on how much water,
sewer, electricity, cable, gas, phone, solid waste, and other utility usage would be generated by
an OMF, and data about existing properties is available only for water, sewer, and surface water.
Given that since the current dominant land use is light industrial in character (including several
auto shops and warehouses) and the fact that an OMF would be a light industrial use, it is
reasonable to assume that any change in utility demand would be relatively small if the land were
to be converted to an OMF, and therefore City utility tax revenue would be about the same.
• This existing site currently has an estimated 320 employees, whereas an OMF would have an
estimated 300 employees, a reduction of about 6%. The implication is that there would be some
loss of indirect and induced economic activity if the land were converted to an OMF.
• There are 7.25 acres of undeveloped land currently on the site, zoned industrial. This represents
about 15% of the total land area. This means that if the site is fully developed by Sound Transit,
then the long-term displacement of private sector industrial activity would be even greater than
what can be measured in the short-term.
In summary, the most significant loss from an OMF development would be the foregone tax revenue
to local jurisdictions —the City, school district, and fire district —that would result from converting
private industrial land to publicly owned industrial land. There would also be other impacts —fewer
employees, a reduction of indirect and induced economic activity, and the opportunity cost of
foregone future private industrial development. Surface water fee revenue could increase.
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April 2020
City of Federal Way
Sound Transit OMF Site Impact Assessment
FCS GROUP Memorandum
Comparing the Christian Faith Center Site with Potential OMF
This comparison is also limited at this time by the data available on the potential OMF.
• With this option, there would be an annual loss of about $88,000 in general City operating
revenue (or $176,000 in a two-year budget) and an additional revenue loss to the Federal Way
School District and South King Fire & Rescue of about $44,000 per year.
• It is reasonable to assume that surface water fee revenue would be higher with an OMF. Surface
water revenue cannot be used for general City operations.
• There would be little potential loss of state shared tax revenues if an OMF were built at this site.
• Current water and sewer usage is noticeably higher at this site than at the 3441h Street Site, due to
its use as a school and church rather than for industrial uses. Because an OMF generally fits the
light industrial profile of the 344' Street Site, an OMF might use less water and sewer than the
CFC Site. However, data is not available on how the CFC Site would compare to an OMF with
respect to other utilities such as electricity, natural gas, or solid waste, so it is hard to even make
a reasonable assumption about how City utility tax revenue might be affected.
• The CFC Site now has an estimated 228 employees, compared with Sound Transit's estimate of
300 employees working at an OMF. That would be an increase of 32%. The implication is that
there would be an increase in indirect and induced economic activity if the land were converted
to an OMF.
• The CFC Site now has 22.85 acres of undeveloped land; however, 19 of those acres serve as a
parking lot for the church and school. Those 19 acres are zoned multi -family, so they could
conceivably be developed at a higher intensity (as apartments or for -sale townhomes, condos,
etc.). However, the greater likelihood is that as long as the church and school remain on the
adjacent parcels, the parking lot will be needed to support the site's primary use. The remaining
3.85 acres of undeveloped land represent 7% of the total site. The development of the site by
Sound Transit would preclude future development of those 3.85 acres.
In summary, the most significant loss from an OMF development at the CFC Site would be the
foregone tax revenue to local jurisdictions —the City, school district, and fire district —that would
result from converting the current uses to publicly owned land. However, because most of the site is
already tax-exempt, the revenue impact would be much less than it would be from the 344' Street
Site. With the CFC site, there would be some opportunity cost of foregone future private
development (including the potential for multi -family development). However, this disadvantage and
the tax revenue loss would be partially offset by additional employment and a corresponding increase
in indirect and induced economic activity if an OMF were to be located there.
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