Council PKT 01-16-2004 Retreat
CITY OF FEDERAL WAY
The City Council's Strategic Planning Retreat
Friday, 16 January 2004,8:30 a.m. - 5:00 p.m.
Saturday, 17 January 2004,8:30 a.m. - Noon
Federal Way Execute1
31611 20th Ave. S; 253.941.6000
AGENDA
RETREAT GOALS:
1. Discuss and outline where the Council wants the City to be in 15-20 years.
2. Reach agreement on goals and priorities for 2004-2006 that will enable the City
to achieve the Council's direction.
3. Identify other issues and factors that will affect the City's ability
to achieve its goals.
Friday Morning Sessions
1.
8:30 Welcome, Introductions and Review Retreat's Purpose
Mayor
II.
8:40 Review Goals, Agenda, Ground Rules and
Facilitation Techniques
Jim Reid
III.
8:50 Review 2003 Accomplishments
David/Everyone
o Since last year's Council retreat, what has the City
accomplished to implement the Council's direction?
IV.
V.
VI.
9:00
Present and Discuss Key Themes of the Interviews
and Issues to Discuss
9:15
Federal Way in 15-20 Years
o What does the Council want the City to be in 15-20 years?
o What are 3-4 goals for 2004-06 to achieve that direction?
o What kind of leadership will be needed to achieve it?
o What might be some barriers to achieving it?
10:15 break
10:30 Economic DevelopmentJDowntown
o Define and agree on the issues: Jim Reid presents his
interpretation of the Council's mutual interests. is his
interpretation accurate?
o Does the Comprehensive Plan encompass the City Council's
mutual interests and vision for the City Center for the next
iO to 20 years?
o What tools does the City Council wish to use to achieve this
direction and vision?
o What process{es)for engaging public involvement and input
does the City Council wish to use?
o Identify and agree on the next step and who is responsible.
12:15 lunch
Friday Afternoon Sessions
VII.
1 :00 Economic Development/Downtown (continued)
2:00 break
2:15
Annexation Policy
o Define and agree on the issues: Jim Reid presents his
interpretation of the Council's mutual interests. is it accurate?
o Do they reflect the direction the Council wants for the City?
Jim/Council Members
Everyone
Everyone
Everyone
o Does the current annexation policy(not formally adopted)
need to be revisited?
o Does the Council envision ultimately annexing everything
in the PAA?
o lfso, what is the timeframe you would like to adopt?
3 :30 break
VIII. 3:45
IX.
4:15
Council Rules
o Are there any rules the Council wants to consider revising?
o Is there agreement on the rules to be revised?
o Is there proposed language by which to revise them?
o If not, what should be the process for revising them?
Review Today's Discussions and Decisions
and Preview Tomorrow's Agenda
5:00 adjourn
x.
8:30
Saturday Sessions
XI.
8:45
Review Yesterday's Decisions and Agreements,
and Today's Agenda and Goals
City's Current Salary Structure
o What is the City's current salary structure/pay for
performance system and how does it work?
o What are the Council's mutual interests in this issue?
o Does the Council want to continue the current system
or consider this issue further?
9:30 break
Council Members
Everyone/Jim
JimlEveryone
Everyone
XII.
9:45
Looking Ahead to the 2005-06 Budget
o What are the realities and constraints of the 05-06
budget revenues and expenditures?
o What might be its potential impacts on City services?
o Are there any changes to the budget development framework?
o Are there any changes to the proposed public process?
XIII. 11 :00 Working Together in 2004
o As we prepare to tackle difficult and challenging issues
in 2004, how are we doing as a team?
o What factors should we be aware of and consider that
could affect our work together?
XIV. 11:30 Review the Retreat's Decisions and Agreements
XV.
11:40 What are We Taking Away from the Retreat?
XVI. 11 :55 Final Thoughts and Perspectives
Noon adjourn
Everyone
Everyone
Jim/Everyone
Everyone
Mayor
CITY OF FEDERAL WAY
MEMORANDUM
Date:
To:
Via:
From:
Subject:
January 9,2004
City Councilmembers
David H. Moseley, City Manager
Patrick Doherty, Deputy Director, Community Development Services
City Center Redevelopment Strategies
KEY QUESTIONS:
· Does the Comprehensive Plan encompass the City Council's vision for the City
Center for the next 10 to 20 years?
· What tools does the City Council wish to use to achieve this vision?
· What process(es) for engaging public involvement and input does the City
Council wish to use?
BACKGROUND:
The Federal Way Comprehensive Plan, developed in the mid-l 990s aHer an extensive
. public-involvement process, lays out the following over-arching principals for the
Federal Way City Center:
· Create an identifiable downtown that is the social and economic focus of the City;
· Strengthen the City as a whole by providing for long-term growth in employment
and housing;
· Promote housing opportunities close to employment;
· Support development of an extensive regional transportation system;
· Reduce dependency on automobiles;
· Consume less land with urban development;
· Maximize the benefit of public investment in infrastructure and services;
· Reduce costs of and time required for permitting;
· Provide a central gathering place for the community; and
· Improve the quality of urban design for all developments.
Contrasting with this Comprehensive Plan vision, however, the current state of the
Federal Way City Center is dominated by <me-story retail and service shopping center
and strip centers with expanses of surface parking lots.
In addition, it is of note that more recent surveys of public opinion with regard to the City
Center appear to support the Comprehensive Plan vision. The surveys conducted by the
Leonhardl:Fitch group in association with the branding research yielded some interesting
results. Several sectors of the City residents and businesses were interviewed, including
executives from the City's largest businesses, community representatives, Chamber of
Commerce representatives and others_
Memo to Council Retreat January] 6-1 7,2004
City Center Redevelopment
Page 2 of6
When asked questions about the City's greatest weaknesses, the City's greatest
opportunities, and what the City can do to attract more businesses, all sectors of the
community included the following in their responses:
· The City has. a weak downtown, little sense of place, an unattractive downtown,
etc.; and
· 1be City should create an attractive, pedestrian-oriented downtown, create a heart
for the community, etc.; and
.
Please see Attachment F for a more detailed summary of these survey results.
In summary, notwithstanding the adoption of a Comprehensive Plan and accompanying
land use regulations that would promote denser, more multi-use development, the City
Council has recognized that additional regulatory and/or financial incentives may be
necessary to accomplish these objectives and has demonstrated its interest in stepping up
efforts to foster this type of development by the following measures:
· Continued investment in the City Center ROW improvements has occurred.
· The City Council has adopted Building Code provisions that allow five stories of
wood-frame construction over concrete to accommodate the most recent mixed-
use development types.
· Last year the City Council adopted a 1 O-year property tax exemption for
residential developments in the City Center.
· The City is currently in the process of carrying out a SEP A Planned Action to
encourage and accommodate City Center development.
· Substantial progress in improving the permitting system has been made, and the
triggers for ROW improvement associated with property redevelopment have
been adjusted so as not to encumber smaller remodeling projects.
In addition, over approximately the past year and a ha1fthe City Council has expressed
interest in exploring even more proactive strategies for fostering desired City Center
redevelopment, including the following potential strategies:
· City partnership with private developers on public parking facilities;
· City partnership with private developers on ROW improvements;
· City purchase of key redevelopment site(s) to market for desired development
through an RFP.
At that Study Session, the City Council decided to take up discussion on these matters at
the January 2004 Council retreat.
What follows in the remainder of this memorandum are:
Memo to Council Retreat January 16-17,2004
City Center Redevelopment
Page 3 of6
· An outline of the above-mentioned potential redevelopment strategies and
potential funding mechanisms, (Please refer to Attachment A, October 24,2003
Memo to Council Study Session, for a detailed description of these strategies and
mechanisms)
· A set of recommended criteria for consideration of public-private partnership
proposals from private developers, and
· Recommended options for processes to engage and involve the public in any of
these strategies.
For your information and reference, the following documents are attached:
· Attachment A, memo to City Council for 10/28/03 Study Session, dated 10/24/03
· Attachment B, memo to FEDRAC, dated 11/20102
· Attachment C, memo to FEDRAC, dated 9/26/02
· Attachment D, City Center Chapter, Federal Way Comprehensive Plan
· Attachment E, Economic Development Chapter, Federal Way Comprehensive
Plan
· Attachment F, summary of Leonhardt:Fitch survey results related to City Center
POTENTIAL CITY CENTER REDEVELOPMENT STRATEGIES FOR
FEDERAL WAY
As mentioned above, three general strategies for City Center redevelopment have been
focused on (please see Attachment A for greater detail):
· City participation in project-related ROW improvements,
· City participation in parking facilities, and
· City purchase of City Center land.
PARTNERSHIP METHODS
"Responsive" Approach
One approach for partnering with private-sector developers would be for the City Council
to develop criteria defining desirable City Center redevelopment projects, identify and/or
designate potential funding sources and strategies, and establish policies and procedures
that would allow the City to respond quickly and strategically to opportunities for public-
private partnership thatmight arise from the private sector.
A private developer who approaches the City with redevelopment ideas could be
informed of the City's policies with regard to City Center redevelopment and potential
financial partnership to achieve these goals. If such adeveloper proposed a specific
partnership concept (ROW improvements or parking facilities), the City could then set
Memo to Council Retreat January 16-17, 2004
City Center Redevelopmcnt
Pagc 4 of 6
into motion a pre-approved procedure for consideration of such a proposal in a timely
fashion.
RFP Approach
On the more proactive side, the City could develop an RFP that would be- published in
trade journals and sent to developers along the West Coast (or beyond), indicating the
City's willingness and ability to partner with private-sector developers for desired City
Center redevelopment schemes. The notion of floating an RFP to invite prospective
developers works generally the same way for the three redevelopment strategies
discussed above. The City offers up either financial contribution or City Center land as
the incentive, describes its desired redevelopment typology, develops predetermined
evaluation criteria, and advertises the RFP to the widest audience feasible.
Potential Partnership Criteria
The criteria for both the "responsive" and RFP approaches would be essentially the same.
Here are some preliminary criteria for consideration and discussion:
· The proposed development is comprised of (or contains) mixed-use, multi-story
buildings, and/or offers a "village" or "life style center" site and building design,
with street-oriented storefronts, outdoor eating and dining, outdoor public
amenities such as artwork, fountains, plazas and seating;
· The proposed development is located within the City Center and is of sufficient
scale and scope to have a substantial impact on the image and desirability of the
City Center and suggests a high probability of inducing additional, spin-off
development;
· The proponent can provide a solid track record with similar private development
(previous experience in public-private partnerships desirable);
· The project is projected to provide additional jobs at a variety of levels (lower-
and middle-income jobs). Preference between competing projects could be given
to those projects projected to create a greater number of jobs per amount of
requested public participation;
· Economic impact analysis. A detailed analysis and estimate of the project's direct
economic impact in increased property, utility, and sales taxes, as well as an
analysis and estimate of indirect economic impacts through the multiplier effects
throughout the local economy;
· Financial "gap" analysis, including developmcnt costs, projected revenue,
disclosure of developer's desired capitalization ratc, internal rate of return (based
on other portfolio projects), etc., in ordcr to dctermine the necessary level of
public participation;
POTENTIAL FUNDING OPTIONS
Memo to Council Retreat January 16-17, 2004
City Center Redevelopment
Page 5 of6
Funding Sources
The following are potential sources of funding that could be considered. to finance the
redevelopment strategies discussed above:
1. Bonding of the excess revenue from the 1/2% utility tax dedicated to the Public
Safety facilities.
2. Sale, rental or trade of City Hall.
3. Eannark yearly carry-forward funds to a pool of funds for ROW improvements.
4. King County "float loan."
5_ Borrow money.
6. Create a revolving funding pool.
PUBLIC PROCESS OPTIONS
There are a wide variety of processes by which municipalities have engaged significant
public involvement in these and other, similar redevelopment strategies.
Most communities begin where we have already begun; i.e., with a focused subarea
planning effort involving generous public involvemenL In our case, the City Center
Chapter of the Federal Way Comprehensive Plan is our "subarea plan." That plan was
developed through the "CityShape" process that was led by professional consultants and
included substantial opportunities for public involvement and participation, including
hands-on charrette-style workshops, surveys, public open houses and meetings, as well as
the standard Planning Commission and City Council review meetings, which were open
to and included public commenL
From that starting point, cities can continue to engage the public through any number of
public-involvement strategies, which may be used separately or together. These
strategies include:
1. Public meetings or open houses in the City Center or elsewhere tlrroughout the
City.
2. Design charrettes.
3. Public surveys - on the City website, by phone, by postcard, etc.
These strategies, and others, can successfully be used to engage public involvement
within the context of several different types ofredevelopment-focused decision-making
bodies, which are summari~ed below:
1. Council study sessions that include a public comment periods.
2. Extra FEDRAC meetings that include a public comment periods.
Memo to Council Retreat January 16-17, 2004
City Center Redevelopment
Page 6 of 6
3. Public~Private Partnership Oversight Committee. This is another vehicle for
regularized public involvement. The City of Seattle formed such a committee in
the 1990's to help establish policies on entering into public-private partnerships
and then to provide public oversight of all such partnerships entered into by the
City of Seattle. Their meetings were open to the public and engaged considerable
public comment at times.
4. Redevelopment Advisory Committee. Similar to the above, a redevelopment
commission would act more like a planning commission and not take on the
quasi-governmental functions of floating bonds, buy and selling property? etc. In
this case, commissioners would not include City Councilmembers, and they
would offer recommendations to the City Council. Again, due to their focused
mission, public involvement in redevelopment issues, projects, policies, etc.,
would be possible at their regularly scheduled meetings, open houses, charrettes,
etc.
5. Redevelopment Authority. This is perhaps the most common vehicle for
municipalities across the nation that engage in redevelopment activities.
Particularly in states where local redevelopment efforts are more commonplace,
cities often form public development or redevelopment authorities. In most cases
City Councilmembers are also members of these authorities - in some cases the
authorities are comprised solely of Councihnembers simply "wearing a different
hat." In some cases the authorities have the ability to incorporate under state law,
float bonds, buy and sell properties on their own, while in other they act like a
planning commission and offer recommendations to their City Council. Local
examples of such authorities are the Thea Foss Development Authority in Tacoma
and the Vancouver, Washington Downtown Redevelopment Authority. With a
board expressly focused on the topic of downtown redevelopment, such
authorities offer a regular schedule of opportunity for public involvement in
redevelopment efforts - at their open public meetings, at specific open houses
held on specific projects, at design charrettes, etc.
In summary, there are numerous potential methods and opportunities available for public
involvement in City Center redevelopment strategies that could be used together or
separately with any of the boards, commissions or committees, cited above - or in
conjunction with Council study sessions or committee work.
MEMORANDUM
TO:
Federal Way City Council
FROM:
Kathy McClung, Community Development Services Director
DATE:
January 8, 2004
RE:
Annexations (Copy of Draft PAA Study attached)
Key COWlcil Questions:
Does the CillTent annexation policy (notformally adopted) need to be revisited?
Do the cowIcil envision ultimately annexing everything in the P AA?
If so, what is the timeframe you would like to adopt?
Background:
City Actions to Date:
· Adopted Potential Annexation Area (P AA) in cooperation with adjacent cities and King
COWlty in 1993.
· Initiated a PAA Study in order to establish zoning, assess infrastructure and prioritize areas
for annexation_
· Passed resolution to add three areas (Redondo East, North Lake and Brittany Lane) to next
Fall's ballot for annexation.
2004 Work Plan:
· Adopt P AA Study.
· Complete update to the Comprehensive Plan and incorporate zoning decisions for P AA area.
· File Notice ofIntent to Boundary Review Board.
· Resolve outstanding policy issues (i.e. signs, jwlkyard)
Other Considerations:
· Countywide Planning Policies state that cities adopt a phasing plan for annexation of their
PAA's.
· King County is pushing amIeXillions to occur within the next three years.
· The State Growth Management Act requires incorporation ofPAA's.
· Not every area in the P AA will be revenue neutral.
Current Policy:
Until recently, the City has not considered an aImexation area until citizens in that area have
requested it This is not a formally adopted policy_ How aggressively should the city pursue annexations?
Council Direction:
What is tllC annexation work program for the next three years? The PAA Study is scheduled to
begin hearings at the Planning Commission meeting in Febmary. The issues should reach the Council this
Spring. At that time, complete, detailed infomlation will be provided for the entire P AA area. Staff had
anticipated that policy decisions about P AA priorities would be addressed at that time. The Council may
want to delay any dccisions on the P AA until they have detailed information to study and the consultants
are available.
City ofFcderal Way
MEMORANDUM
Date:
January 8,2004
To:
City Council
From:
Mary McDougal, Human Resources Manager
Subject:
City's Current Salary Stmcture
Key Questions:
· What is the City's current salary struchlre/pay for performance system and how
does it work? .
· Does the Council want to continue the current system or consider this issue
further?
1. Pay Plan History and Policies
· After establishing the new City and many of its structures the City Council
formed a citizen group to work with a consultant and staff to design a pay plan.
The process started in April 1991 and resulted in a classification and
compensation plan that was adopted by the City Council on November 19, 1991.
The pay plan set a salary range of26.5% from the lowest to maximum salary for
each position/classification.
· In addition, the Council set the top salary of the range for each position at the 60th
%ile of the market for the position, meaning that once an employee reached the
top oftheir range, the salary for the position would be at the point where it was
above 60% of the comparables and below the other 40%.
· At the December 17, 1991 City Council meeting, the pay plan was further refined
to add a performance element. The final plan split the 26.5% range into two
halves of 13.25% each. The first half of the range was divided into 4 steps (Steps
A - D), and employees would progress through the steps based on annual
satisfactory performance review.
· The second half of the range was reserved for "performance pay". Once the
employee reached the top step (Step D), the employee's base salary remained at
that point, and the employee was eligible to receive up to the top of the range as
"performance pay" which was based on goal achievement, and paid out in a lump
sum payment in Febmary of the following year. This performante~based pay
plan was called "P3".
. The "performance pay" is considered "at-risk" because the employee has to re-
earn the money each year in order to be paid at the 60th %ile compensation level
set by Council. Therefore, the performance pay is not a "bonus" -- "bonus" pay is
beyond the position's market driven salary.
. Because ofthe "at risk" nature of the pay plan, employees have raised issues
about the performance pay plan each year since its adoption. The salary plan was
adjusted in 1996 to add a fifth step (Step E), which resulted in a decrease in the
"at risk" pay from 13.25% to 8.48% or approximately 1/3 ofthe whole range.
This was also the year the City did not provide a cost ofliving adjustment to
employees.
. The City has attempted to maintain salary ranges at the 60th%ile ofthe: market by
providing cost of living adjustments comparable to other cities, by limited scope
reviews conducted in 1996 and 1997, and by reviews upon department request
only after 1997. The City has not done a comprehensive salary study since 1991.
. Any changes to the plan are subject to bargaining with the City's unions.
II. Perfonnance-based Pay Plan (P3) Procedures
. Goals are jointly set by the employee and supervisor by the end of March each
year. Department Directors review and approve the goals for each individual to
ensure consistency across the department.
. The goals are intended to flow from the Council to the City Manager and each
level of management for consistency with the City's goalsl budget objectives.
. Each employee generally sets 3 - 4 goals. These may include team or individual
goals, The goals are to be as measurable and quantifiable as possible.
. Each objective is weighted in terms of overall importance and the weight of all
objectives equals 1.0. The supervisor determines the weights of individual
objectives. This includes a performance goal with the weight of .25 or .50 based
on the cmployec's position, and is based on the City's performance appraisal.
. Goals are revised during the year ifprioritics change, orifthe employee's
position changes. Employees and supervisors share responsibility for revising
goals in a timely manner.
. During December, the employee and supervisor meet to discuss goal progress and
performance evaluation, and to determine the .percentage of goals achieved.
Human Resources calculates the payment to be paid in February of the next year.
. Employees may appeal individual award to the City Manager. In addition, awards
are pro-rated by the numbcr of months of eligibility/participation for employees
entering or exiting the plan during the calendar/plan year. Participation in the
phm is not mandatory.
P3 Award History
.'-,- - _.~~ -~,~
Year if Elig!bJe TIes Avg % A~~!dcd Average Payment
~-",.~- ..",~.,.,-
1992 26 85% $3.,_21 I
-- -."'~,,~.- --~--._.~._-
1993 36 75% $3416
- --- .~,~,^,.- --
1994 56 82% $3690
.- - --
1995 67 81% $4374
~-',-~.
1996 58 95% $3142
1997 131 97% $3021
1998 160 97% $3206
--
1999 109 97% $3387
2000 112 -99% $3582
2001 116 97% $3401
2002 149 96% $3513
III. Plan Strengths
· The plan provides a method for employees to influence their income through their
own accomplishments, and assures consistently outstanding effort from
employees.
· Employees can reach the maximum pay within 5 years instcad of the 8 years in a
typical step plan.
· The City benefits from specifying accomplishments that are in the best interest of
citizen and which support the City's overall goals. .
IV . Concerns/Administrative Challenges
· The last comprehensive study of23 benchmark positions of 49 total positions was
conducted in 1991, while consultants recommended comparisons every 3 years.
· Salary reviews upon request only have resulted in problems with internal
alignment.
· Exit interviews indicate that P3 is not a major factor in decision to leave City
employment, but is regularly mentioned as an aspect of employment that
departing employees did not like.
· In recent years, starting salaries for new hires have moved toward mid-range
instead of remaining at the starting range, indicating that starting salaries are too
low for the candidates the City wants to hire. In 2000, 20 of the 29 employees
(69%) hired started at the A or B step, while in 2002, there were 15 of the 39
employees (38%) and in 2003, 21 ofthe40 employees hired (49%) started at the
A or B step.
Memorandum
Date:
To:
From:
Via:
Subject:
January 8, 2004
Federal Way City Council
lwen Wang, Management Services Director
David H. Moseley, City Manager
2005-06 Budget Outlooks
Key Council Qllestion:
What are the realities and constraints of the 05-06 budget revenues and expenditures?
What might be its potential impacts on City services?
Background:
The attached outline will provide the following background information:
1. An overview ofthe2004 General/Street budget, and the six-year projection.
2. Proposed 50/06 budget development framework.
3. Where Federal Way per capita revenues and expenditures stand in King County.
4. Proposed public process and timeline.
Council Directions:
· Any changes to the budget development framework?
· Any changes to the proposed public process?
2005/06 Budget Challenges
At the 2004 budget adoption, we identified a number
of future budget challenges:
)> $750k loss for Street Maintenance caused by 1-776
)> Rising employee benefit costs - medical, stat~
pension, workers compensation growing faster
than inflation
)> Slow revenue growth - slow sales tax recovery
combined with 1 % property tax growth limit
. We now need to add the potential impact of
the new "25% Property Tax" rollback initiative
Baseline Buduet Assumptions
Baseline budget focuses on the structural balance of the
budget, compares on-going revenues and on-going
expenditures for a six-year planning horizon.
Future projection assumes revenue to grow by inflation,
and expenditure increase only at 90% of inflation.
Baseline Budqet does not include 1-time funded proqrams.
Approximately $400k of these 1-time funded programs have been
continued for multiple years, including PSRC membership, newsletter,
lobbyist, interns, sister city travel, DV court advocacy (funded with
CDBG prior to 2004), human service supplement, arts commission
supplement, code amendments, 2 pso positions (initially funded by
COPS More grants), senior lunch program after KC discontinued their
funding, park maintenance supplement, and ROW damaged tree
replacement program.
1
2004 Baseline Revenue (000 omitted)
2004 GeneraVSlreet On.going Revenue
Property Tax
27%
4%
Se,,"ce Fees
11%
license!
Permits --
3%
Slate Shared
Re-enue
3%
local Sales
Tax
36%
Other taxes
14%
2004 Baseline Expenditure (OOOomitled)
2004 GenerallSheet On-going Expenditure
2
Future Projection - Ongoing
Revenue/Expenditures only
1. The reason 2004 base budget gap is greater than 2005 is due to the Admissions Tax wiD lake effect in
2005. The 2004 gap reflects the loss of $750k from 1-766 and the initial gap for the new police oflicers
added and to be funded by Admissions Tax starting 2005, as approved by the council in 2002. The
gap is currently funded with Hme sources (CM contingency and carry forward from 2002).
Costs of other l-lime funded programs. such as those identified in the earlier slide, are not included in
this projected gap. If they were included. the gap would increase by $4ook per year.
Long Range Outlook
Baseline General ,nd Street Fund Projection
- .
:::=~- --:::==:
~~
______~- .:r.::::: r .-~ ---:..--- \,~~- ---
.-.--..--- .. -- --- l3aseHne - Re,enun,:2S%-
12lill> .-------------. ______ Revenue Ies~ Property Tax
11M'" L......------- ,... ". ",..-----.-
fl99Acfu:al ~"(;IUiIl iOOtAclullf ~A~llJill iOOOY(Nl;) lOOtVE.ND 2005Proj XIo6Prtlj 2007f>roj :<<!iPl\li 1OO9-Pmj 2O'OPl(lj
3
Effect of Citizen Initiatives
1~695
Eliminate MVET
$ 2 million a year
1-747
limit property tax growth to the
lower of 1 % or inflation
$340k (as of 2004. $
will grow over time.)
1-776
Eliminate local voter approved
licensing fee
$750k
Potential New Initiative:
25% Require property tax rolled back by $2 million
Property Tax 25%
Rollback
Proposed Budget Planning Framework
. Re-examine our business practices and
consolidate services where possible.
. Reprioritize our services. programs for potential
reductions.
. Evaluate employee benefit costs/options (some will
be subject to bargaining).
. Examine revenue options.
Minimize impact on the community when making
necessary revenue and service adjustments.
4
C Cities
002
er Capita
F Revenue
djusted by Fire and
ibrary Costs
Only 36 cities in comparison;
The Cities of Pacific and
Snoqualmic do not have
sufficient data to compare,
and City of Milton has only a
small portion in King County
C Cities
002
er Capita
F
xpenses
djusted by Fire and
ibrary Costs
Only 36 cities in comparison;
The Cities of Pacific and
Snoqualmie do not have
sufficient data to compare,
and City of Milton has only a
small portion in King County
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Per Capita ~ne'31 Fund Reve-nues
....
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.....
34th (was 33rd) 0' 3&
>-
Per Capita Gltneral Fund Ex~nses
S20Q $.tOO ~ seoo $1,000 $1,200 It.400 51,600
33<d (was 32nd) of 3G
5
* The city's 2004 levy rate is $1.30 per $1000 AV.
Public Participation
Online citizen survey
Presentations at community group meetings
(spring - outlook; fall - recommendations)
Public hearings
)> Preliminary public hearings (solicit public input
during budget development)
. )> Official public hearing (on recommended budget)
!:'.-:
~.';::
,"irp Others?
;:',;(;~
\i'~
.'A~
6
Budget Calendar
Events Time
.Council Retreat - Budget Direction January
.Budget Open Houses/Community Meetings . March-April
.Preliminary Budget Public Hearing May - July
.Department Develop Budget Proposals
.CM Review Department Budget August
.Prepare recommendations
-CM Proposed Budget to Council October
.Department budget presentations to Council
.Public Hearing on Revenue Projection
-
.Council Deliberation sessions November
-Final Budget Public Hearing
-Council adopts budgeVproperty tax levy
Council Direction
. Any changes to the budget
development framework?
. Any changes to the proposed public
process?
7
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CITY OF FEDERAL WAY
The City Council's Strategic Planning Retreat
Friday, 16 January 2004, 8:30 a.m. - 5:00 p.m.
Saturday, 17 January 2004, 8:30 a.m.- Noon
Federal Way Executel
31611 20th Ave. S; 253.941.6000
Revised Draft
AGENDA
RETREAT GOALS:
1. Discuss and outline where the Council wants the City to be in 15-20years.
Reach agreement on goals and priorities for 2004-2006 that will enable the City
to achieve the Council's direction.
3. Identify other issues and factors that will affect the City's ability
to achieve its goals.
Friday Morning Sessions
I. 8:30 Welcome, Introductions and Review Retreat's Purpose
Mayor
II,
8:40 Review Goals, Agenda, Ground Rules and Jim Reid
Facilitation Techniques
III. 8:50
Review 2003 Accomplishments
o Since lastyear's Council retreat, what has the City
accomplished to implement the Council's direction?
David/Everyone
Does the current annexation policy(not formally adopted)
need to be revisited?
Does the Council envision ultimately annexing everything
in the PAA ?
lf so, what is the timeframe you would like to adopt?
3:15 break
VIII.
3:30
Council Rules
o Are there any rules the Council wants to consider revising?
o Is there agreement on the rules to be revised?
o Is thereproposed language by which to revise them?
o If not, what should be theprocessfor revising them?
Council Members
4:30 Review Today's Discussions and Decisions
and Preview Tomorrow's Agenda
Everyone/Jim
5:00 adjourn
Saturday Sessions
X. 8:30 Review Yesterday's Decisions and Agreements,
and Today's Agenda and Goals
Jim/Everyone
XI.
8:50 City's Current Salary Structure
o What is the City's current salary structure~pay for
performance system and how does it work?.
o What are the Council%' mutual interests in this issue?
o Does the Council want to continue the current system
or consider this issue further?
Everyone
9:45 break
10:00
Looking Ahead to the 2005-06 Budget
o What are the realities and constraints of the 05-06
budget revenues and expenditures?
o What might be its potential impacts on City services?
Everyone
XIII.
11:00
Working Together in 2004
o As we prepare to tackle difficult and challenging issues
in 2004, how are we doing as a team?
o What factors should we be aware of and consider that
could affect our work together?
Everyone
XIV. 11:30 Review the Retreat's Decisions and Agreements
Jim/Everyone
XV. 11:40 What are We Taking Away from the Retreat?
Everyone
XVI. 11:55 Final Thoughts and Perspectives
Mayor
Noon adjourn '
CITY OF FEDERAL WAY
MEMORANDUM
Date:
To:
Via:
From:
Subject:
January 9, 2004
City Councilmembers
David H. Moseley, City Manager
Patrick Doherty, Deputy Director, Community Development Services
City Center Redevelopment Strategies
KEY QUESTIONS:
Does the Comprehensive Plan encompass the City Council's vision for the City
Center for the next 10 to 20 years?
· What tools does the City Council wish to use to achieve this vision?
· What process(es) for engaging public involvement and input does the City
Council wish to use?
BACKGROUND:
The Federal Way Comprehensive Plan, developed in the mid-1990s after an extensive
public-involvement process, lays out the following over-arching principals for the
Federal Way City Center:
· Create an identifiable downtown that is the social and economic focus of the City;
Strengthen the City as a whole by providing for long-term growth in employment
and housing;
· Promote housing opportunities close to employment;
· Support development of an extensive regional transportation system;
· Reduce dependency on automobiles;
Consume less land with urban development;
· Maximize the benefit of public investment in infrastructure and services;
· Reduce costs of and time required for permitting;
· Provide a central gathering place for the community; and
· Improve the quality of urban design for all developments.
Contrasting with this Comprehensive Plan vision, however, the current state of the
Federal Way City Center is dominated by one-story retail and service shopping center
and strip centers with expanses of surface parking lots.
In addition, it is of note that more recent surveys of public opinion with regard to the City
Center appear to support the Comprehensive Plan vision. The surveys conducted by the
Leonhardt:Fitch group in association with the branding research yielded some interesting
results. Several sectors of the City residents and businesses were interviewed, including
executives from the City's largest businesses, community representatives, Chamber of
Commerce representatives and others.
Memo to Council Retreat January 16-17, 2004
City Center Redevelopment
Page 2 of 6
When asked questions about the City's greatest weaknesses, the City's greatest
opportunities, and what the City can do to attract more businesses, all sectors of the
community included the following in their responses:
· The City has a weak downtown, little sense of place, an unattractive downtown,
etc.; and
· The City should create an attractive, pedestrian-oriented downtown, create a heart
for the community, etc.; and
·
Please see Attachment F for a more detailed summary of these survey results.
In summary, notwithstanding the adoption of a Comprehensive Plan and accompanying
land use regulations that would promote denser, more multi-use development, the City
Council has recognized that additional regulatory and/or financial incentives may be
necessary to accomplish these objectives and has demonstrated its interest in stepping up
efforts to foster this type of development by the following measures:
· Continued investment in the City Center ROW improvements has occurred.
· The City Council has adopted Building Code provisions that allow five stories of
wood-frame construction over concrete to accommodate the most recent mixed-
use development types.
· Last year the City Council adopted a 1 O-year property tax exemption for
residential developments in the City Center.
· The City is currently in the process of carrying out a SEPA Planned Action to
encourage and accommodate City Center development.
· Substantial progress in improving the permitting system has been made, and the
triggers for ROW improvement associated with property redevelopment have
been adjusted so as not to encumber smaller remodeling projects.
In addition, over approximately the past year and a half the City Council has expressed
interest in exploring even more proactive strategies for fostering desired City Center
redevelopment, including the following potential strategies:
· City partnership with private developers on public parking facilities;
· City partnership with private developers on ROW improvements;
· City purchase of key redevelopment site(s) to market for desired development
through an RFP.
At that Study Session, the City Council decided to take up discussion on these matters at
the January 2004 Council retreat.
What follows in the remainder of this memorandum are:
Memo to Council Retreat January 16-17, 2004
City Center Redevelopment
Page 3 of 6
· An outline of the above-mentioned potential redevelopment strategies and
potential funding mechanisms, (Please refer to Attachment A, October 24, 2003
Memo to Council Study Session, for a detailed description of these strategies and
mechanisms)
· A set of recommended criteria for consideration of public-private partnership
proposals from private developers, and
· Recommended options for processes to engage and involve the public in any of
these strategies.
For your information and reference, the following documents are attached:
· Attachment
· Attachment
· Attachment
· Attachment
· Attachment
Plan
· Attachment
A, memo to City Council for 10/28/03 Study Session, dated 10/24/03
B, memo to FEDRAC, dated 11/20/02
C, memo to FEDRAC, dated 9/26/02
D, City Center Chapter, Federal Way Comprehensive Plan
E, Economic Development Chapter, Federal Way Comprehensive
F, summary of Leonhardt:Fitch survey results related to City Center
POTENTIAL CITY CENTER REDEVELOPMENT STRATEGIES FOR
FEDERAL WAY
As mentioned above, three general strategies for City Center redevelopment have been
focused on (please see Attachment A for greater detail):
· City participation in project-related ROW improvements,
· City participation in parking facilities, and
· City purchase of City Center land.
PARTNERSHIP METHODS
"Responsive" Approach
One approach for partnering with private-sector developers would be for the City Council
to develop criteria defining desirable City Center redevelopment projects, identify and/or
designate potential funding sources and strategies, and establish policies and procedures
that would allow the City to respond quickly and strategically to opportunities for public-
private partnership that might arise from the private sector.
A private developer who approaches the City with redevelopment ideas could be
informed of the City's policies with regard to City Center redevelopment and potential
financial partnership to achieve these goals. If such a developer proposed a specific
partnership concept (ROW improvements or parking facilities), the City could then set
Memo to Council Retreat January 16-17, 2004
City Center Redevelopment
Page 4 of 6
into motion a pre-approved procedure for consideration of such a proposal in a timely
fashion.
RFP Approach
On the more proactive side, the City could develop an RFP that would be.published in
trade journals and sent to developers along the West Coast (or beyond), indicating the
City's willingness and ability to partner with private-sector developers for desired City
Center redevelopment schemes. The notion of floating an RFP to invite prospective
developers works generally the same way for the three redevelOpment strategies
discussed above. The City offers up either financial contribution or City Center land as
the incentive, describes its desired redevelopment typology, develops predetermined
evaluation criteria, and advertises the RFP to the widest audience feasible.
Potential Partnership Criteria
The criteria for both the "responsive" and RFP approaches would be essentially the same.
Here are some preliminary criteria for consideration and discussion:
· The proposed development is comprised of (or contains) mixed-use, multi-story
buildings, and/or offers a "village" or "life style center" site and building design,
with street-oriented storefronts, outdoor eating and dining, outdoor public
amenities such as artwork, fountains, plazas and seating;
· The proposed development is located within the City Center and is of sufficient
scale and scope to have a substantial impact on the image and desirability of the
City Center and suggests a high probability of inducing additional, spin-off
development;
· The proponent can provide a solid track record with similar private development
(previous experience in public-private partnerships desirable);
· The project is projected to provide additional jobs at a variety of levels (lower-
and middle-income jobs). Preference between competing projects could be given
to those projects projected to create a greater number of jobs per amount of
requested public participation;
· Economic impact analysis. A detailed analysis and estimate of the project's direct
economic impact in increased property, utility, and sales taxes, as well as an
analysis and estimate of indirect economic impacts through the multiplier effects
tt~roughout the local economy;
Financial "gap" analysis, including development costs, projected revenue,
disclosure of developer's desired capitalization rate, internal rate of return (based
on other portfolio projects), etc., in order to determine the necessary level of
public participation;
POTENTIAL FUNDING OPTIONS
Memo to Council Retreat January 16-17, 2004
City Center Redevelopment
Page 5 of 6
Funding Sources
The following are potential sources of funding that could be considered to finance the
redevelopment strategies discussed above:
1. Bonding of the excess revenue from the 1/2% utility tax dedicated to the Public
Safety facilities.
2. Sale, rental or trade of City Hall.
3. Earmark yearly carry-forward funds to a pool of funds for ROW improvements.
4. King County "float loan."
5. Borrow money.
6. Create a revolving funding pool.
PUBLIC PROCESS OPTIONS
There are a wide variety of processes by which municipalities have engaged significant
public involvement in these and other, similar redevelopment strategies.
Most communities begin where we have already begun; i.e., with a focused subarea
planning effort involving generous public involvement. In our case, the City Center
Chapter of the Federal Way Comprehensive Plan is our "subarea plan." That plan was
developed through the "CityShape" process that was led by professional consultants and
included substantial opportunities for public involvement and participation, including
hands-on charrette-style workshops, surveys, public open houses and meetings, as well as
the standard Planning Commission and City Council review meetings, which were open
to and included public comment.
From that starting point, cities can continue to engage the public through any number of
public-involvement strategies, which may be used separately or together. These
strategies include:
Public meetings or open houses in the City Center or elsewhere throughout the
City.
Design charrettes.
Public surveys - on the City website, by phone, by postcard, etc.
These strategies, and others, can successfully be used to engage public involvement
within the context of several different types of redevelopment-focused decision-making
bodies, which are summarized below:
1. Council study sessions that include a public comment periods.
2. Extra FEDRAC meetings that include a public comment periods.
Memo to Council Retreat January 16-17, 2004
City Center Redevelopment
Page 6 of 6
o
Public-Private Partnership Oversight Committee. This is another vehicle for
regularized public involvement. The City of Seattle formed such a committee in
the 1990's to help establish policies on entering into public-private partnerships
and then to provide public oversight of all such partnerships entered into by the
City of Seattle. Their meetings were open to the public and engaged considerable
public comment at times.
Redevelopment Advisory Committee. Similar to the above, a redevelopment
commission would act more like a planning commission and not take on the
quasi-governmental functions of floating bonds, buy and selling property, etc. In
this case, commissioners would not include City Councilmembers, and they
would offer recommendations to the City Council. Again, due to their focused
mission, public involvement in redevelopment issues, projects, policies, etc.,
would be possible at their regularly scheduled meetings, open houses, charrettes,
etc.
Redevelopment Authority. This is perhaps the most common vehicle for
municipalities across the nation that engage in redevelopment activities.
Particularly in states where local redevelopment efforts are more commonplace,
cities often form public development or redevelopment authorities. In most cases
City Councilmembers are also members of these authorities - in some cases the
authorities are comprised solely of Councilmembers simply "wearing a different
hat." In some cases the authorities have the ability to incorporate under state law,
float bonds, buy and sell properties on their own, while in other they act like a
planning commission and offer recommendations to their City Council. Local
examples of such authorities are the Thea Foss Development Authority in Tacoma
and the Vancouver, Washington Downtown Redevelopment Authority. With a
board expressly focused on the topic of downtown redevelopment, such
authorities offer a regular schedule of opportunity for public involvement in
redevelopment efforts - at their open public meetings, at specific open houses
held on specific projects, at design charrettes, etc.
In summary, there are numerous potential methods and opportunities available for public
involvement in City Center redevelopment strategies that could be used together or
separately with any of the boards, commissions or committees, cited above - or in
conjunction with Council study sessions or committee work.
CITY OF FEDERAL WAY
MEMORANDUM
Date:
To:
Via:
From:
Subject:
October 24, 2003
City Councilmembers //'~'/,_
David H. M°selm~City~ ManagYr~V ~
Patrick Doheff~ Director, commhnity- Development Services
City Center lgefle~elopment Strategies
BACKGROUND:
The Federal Way Comprehensive Plan lays out the following over-arching principals for
the Federal Way City Center:
· , Create an identifiable downtown that is 'the social and economic focus of the City;
· Strengthen the City as a whole by providing for long-term growth in employment
and housing;
· Promote housing opportunities close to employment;
· Support development of an extensive regional transp°rtation system;
· Reduce dependency on automobiles;
· Consume less land with urban development;
· Maximize the benefit of Public investment in infrastructure and services;
· Reduce costs of and time required for permitting;
· Provide a-centrfil gathering place for the conununity; and
· Improve the quality of urban design for all developments.
Contrasting with these principals, however, the current state of the Federal Way City
Center is dominated by one-story retail and service shopping center and strip centers with
expanses of surface parking lots. A few significant exceptions to this pattern should be
mentioned, especially as they represent the denser, more multi-use type of development
contemplated in the Comprehensive Plan: the Courtyard by Marriott hotel; the Federal
Way Center office building; the La Quinta Inn; and the John L. Scott office building.
Nevertheless, the majority of the City Center is developed in a manner more consistent
with suburban shopping areas, with even the most recent developtnents reinforcing this
pattern.
Therefore, notwithstanding the adoption of a Comprehensive Plan and accompanying ~
land use regulations that would promote denser, more multi-use development, the City
Council has recognized that more regulatory and/or financial incentives may be necessary
to accomplish these objectives and has demonstrated its ,interest in stepping up efforts to
foster this type of development.
· Continued investment in the City Center ROW improvements has occurred.
Memo to FEDRAC
City Center Redevelopment Stra-tegies
Page 2 of 7
· The City Council has adopted Building Code provisions that allow five stories of
wood-frame construction over concrete to accommodate the most recent mixed-
use development types.
· Earlier this year the City Council adopted a 10-year property tax exemption for
residential developments in the City Center.
· The City is currently in the process of carrying out a_S_EPA Planned Action to
encourage and accommodate City Center development.
· Substantial progress in improving the permitting system has been made, and the
triggers for ROW improvement associated with propb/ty redevelopment have
been adjusted so as not to encumber smaller remodeling projects.
In addition, over approximately the past year City Council has expressed interest in
exploring even more proactive strategies for fostering desired City Center redevelopment.
On October 15, 2002 City Council directed staff to continue to study potential ways the
City could financially participate in right-of-way (ROW) improvements and/or public
parking facilities in the City Center as incentives to desired redevelopment.
Since that time FEDRAC members have continued to discuss these strategies, although
funding discussions were somewhat clouded by the status of the impending City Hall and
community center/pool decisions. Once the .decisions regarding both of those issues were
resolved, staff began exploring these issues and their associated financing strategies this
past Spring and continued through the Summer, reintroducing the topic to FEDRAC at its '
September meeting.
As a preface to some preliminary .recommendations for continued work on these issues,
staff has been asked to provide a brief description of other nearby cities' redevelopment
efforts.
CITY CENTER REDEVELOPMENT STRATEGIES FROM OTHER CITIES
To help illustrate the possibilities with respect to City Center redevelopment strategies,
here are brief summaries of the redevelopment efforts of five loCal cities:
Kent
Kent Station is a $130 million, 530,000 square-foot retail, education, entertainment and
residential project, slated to create a community's focal point and identity, set for
groundbreaking in 2004, with a 2005 opening. The project is located adjacent to Sound
Transit's Sounder Commuter Rail Station and parking garage, Kent's existing downtown
and the King County Regional Justice Center. This project will be developed by Langly
Properties and Tarragon Development on 19.9 acres of property that the City purchased
in 2001.
The City has contributed financially in the following ways:
Memo to FEDRAC
City Center Redevelopment Stra~tegies
Page 3 of 7
$4 million contribution to Sound Transit's parking facility for the Sounder train
station to ensure that a parking structure - not parking lot - be built.
· $14 million to purchase the 19.9-acre site.
· Approximately $2 million in right-of-way and infrastructure improvements,
which leveraged additional State and federal grant monies.
Kent accessed up to $10 million from King County through i~ Community Development
Interim Loan (aka "float loan") funds to help purchase the property initially. These funds
needed to be paid back within 30 months, which was just completed this past Summer.
An RFP was issued and the above-cited developers were awarded the project, based on
their experience, expertise and ability to perform. The developers will be buying back
the property in phases at current market appraised value(s). It is likely that Kent will not
recoup the entirety of its purchase price due to the slump in commercial property values
since they purchased the property, the public components of the project that will benefit
the city and residents, and the specific program tied to the site that affects the free-market
appraisal of the property.
Burien
Burien Town Square is the mixed-use redevelopment of a 10-acre site in downtown
Burien, slated for new civic facilities, retail space, housing, offices, hotel uses, parking -
all bordering a major public square/open space.
Burien already owned a 1.5~acre portion of this site where its existing City Hall is sited.
Approximately 6.5 acres adjacent to City Hall (containing an abandoned Gottschalk's
department store and other buildings) was purchased by the City for approximately $5.1
million. The City has issued a letter of intent to purchase ~the remaining 2-acre parcel,
although as the developers are soon to be selected for this project, it is likely the City will
simply step aside and let the developers purchase this remaining piece. The City has
budgeted at total of $9 million from its CIP budget (funded largely by real estate excise
tax revenues) and $1 from its Parks budget for the property acquisitions and other
improvements/contributions, although current estimates are that the total City expenditure
will be substantially less than that total amount. The City expects to break even or make
a profit in turning over the project to the selected developers, as well as anticipates a
substantial increase in property tax and sales tax revenues over the next ten years.
Burien issued an RFP and garnered several respondents, just recently having chosen Los
Angeles developer Urban Partners LLC as the winning firm. Urban Partners is working
with the City of Pasadena and the LA Metro Transit Authority on a $100 million mixed-
use and transit project in that city, as well as developing mixed-use projects in LA's
Koreatown and the suburban community of Oxnard.
/
Memo to FEDRAC
City Center Redevelopment Strategies
Page 4 of 7
Tukwila
Tukwila Village is a 12-acre mixed-use development along the east side of International
Boulevard (Highway 99) between S. 140th and 144th Streets. The $50 to 100 million
project would contain office, retail and residential buildings in a "village square" format ·
with a public plaza, ground-floor storefronts, and office and residential space above. The
City had two principal objectives with this project: 1) to reifixTigorate a "blighted" stretch
of International Boulevard (crime; drugs, disinvestments, etc.), and 2) to create a city
center for a city that has no "Main Street" and no community focal point. The City
employed the recently updated Community Renewal Act provisions to designate a
community renewal area and project, thus freeing itself for less constrained use of public
funds. One of the difficulties associated with this site was its multiple property
ownerships. The City created a redevelopment plan, updated its Comprehensive Plan,
created design guidelines and issued and RFP. The winning respondent to their RFP was
the Sabey Corporation.
The City bought the properties without using condemnation (and therefore may have paid
~slightly higher prices), for a total of approximately $9 million. In addition, the City will
contribute approximately $2 million for frontage improvements along the subject portion
of International Boulevard. The City used general fund revenues and has issued bonds
against those revenues. The' City anticipates that it will sell the property at a minor
discount from its total acquisition price - again because outright purchase o fall
properties (to avoid condemnations) may have led to somewhat inflated purchase prices.
Lynnwood
Private-sector and public-sector interests have united to create a new City Center Plan at
a cost of over $500,000, split evenly between the sectors. The plan is targeting greater
densities and heights of commercial and residential development, as well as civic uses
and open space, to try to create a "Downtown Lynnwood." Alderwood Mall, at the edge
of the "downtown," is making a $50 million, 400,000-square-foot expansion with more
retail shops, restaurants, a cinema complex and three parking structures. No City money
is involved. A $32 million, 60,000-square-foot convention center is being planned and is
due to open in 2005. It is financed by the South Snohomish County Public Facilities
District, funded with lodging tax revenues and a portion of the sales tax revenues that is
credited back by the State for such projecB (not available in King County).
University Place
This City is pursuing redevelopment of an 8-acre parcel as a mixed use Town Center
consisting of 300-500 housing units (condos, townhouse, leased units) and 325,000
square feet of "lifestyle" type retail (i.e., U-Village with housing on top). The retail will
be located above a 1778-stall parking garage and the housing will be located above the
retail. /
Memo to FEDRAC
City Center Redevelopment Strategies
Page 5' of 7
The City obtained a line of credit (currently 2% interest rate) With the Bank of America.
The line of credit is for 3 years with a possible extension if needed. In the Spring of
2003, the City spent $8.6 million to purchase 8 acres of land within their Town Center
Zone. The City also entered into an agreement to purchase 4 acres owned by the library
for $4 million and to move the existing library to a smaller site within the project area.
The City has spent an additional $500k in various consulting_fees, for a total expenditure
of $13.1 million.
Before purchasing the.land, the City invested approximately $200k of the $500k in
· research activities, sUch as hiring an architectural firm to establish new design guidelines,
a planning consultant to deal with zoning issues, retail and housing consultants to conduct
market studies, and an economist to work out the project finances.
The City sent out requests for qUalifications earlier this month. The City received
responses from three qualified developers and will select its preferred developer in
November, with a final development agreement to be executed next Spring.
The City expects that clearing of the site will begin next APril and construction to be
completed in 2006.
The City views its primary contribution to be the consolidation of the land and the
removal of the tenants. The City expects full cost recovery with respect to the land
purchases (i.e., $13.1 million) and expects that the developer will pay for construction of
the garage. Remaining items, such as road and sidewalk construction, on-street parking,
and other infrastructure improvements remain subject to negotiation.
The City views the likelihood of construction beginning next year as extremely good in
significant part due to the rapid progression of the project (There has not been a lot of
time for the market to change from the time City began land purchases to time when final
development agreement is signed -- RFQ out 2 months after land purchases completed;
preferred developer selected 1 month after RFQ due; final developer agreement signed 5
months later.)
The City expects that the site, which currently yields approximately $45,000 per year in
combined property and sales tax revenues, will yield up to $1.2 million per year in tax
revenues once the project is completed.
POTENTIAL CITY CENTER REDEVELOPMENT STRATEGIES FOR
FEDERAL WAY
Pursuant to previous FEDRAC and City Council direction, three general strategies will
be discussed further below:
Memo to FEDRAC
City Center Redevelopment Strategies
Page 6 of 7
City participation in project-related ROW improvements,
· City participation in parking facilities, and
· City purchase of City Center land.
As a reminder, in previous FEDRAC discussions it was noted that two readily
identifiable barriers to more intensive redevelopment of City_C_enter property are
potentially costly grid-street ROW improvements and/or the provision of costly
structured parking necessary to meet the needs of denser development.
Key tO the City's participation in such improvements has been the desire to keep such
participation associated with public improvements. With ROW improvements, this is
naturally easy to maintain, but with parking facilities, it will be imperative to maintain
clarity with any prospective private-sector partners that City participation must be
restricted to parking facilities (or portions thereof) that can be accessible to the general
public, as well as serve a site's commercial or other uses, or which can be bought back by
the private interest for use as private parking facilities.
CITY PARTICIPATION IN PROJECT-RELATED ROW IMPROVEMENTS
The City's Comprehensive Plan lays out several important additional rights-of-waY ("grid
streets"), or continuation of such grid streets, that major redevelopment projects would be
required to provide land for and/or improve. At current estimates, private development
of grid streets would cost approximately $1500/lineal foot for a private developer who
dedicates the required land for improvement. For a typical 500-foot segment of grid
street that would yield a cost of approximately $750,000.00, with two-thirds of that cost
($500,000) required of a developer/owner of property adjacent on one side.
In order to help soften the brunt of this additional redevelopment cost for desired
development types, one of the concepts under consideration is for the City to partner with
developers of selected projects to share the burden of these ROW improvement costs.
As with the other strategies to be discUssed in more detail below, the most likely
mechanism for entering into such partnerships would be to use the RFP approach.. An
RFP could be formulated that would advertise the availability of City funds to partner
with private developers to share the costs of ROW improvements. Multiple projects
could be possible, depending on the number of respondents, level of partnership
financing needed, types of proposed projects, etc. A more detailed discussion of the RFP
approach will be presented below.
Financing options related to this strategy and others will be discussed later in this memo.
PARKING FACILITIES
We have repeatedly heard from property owners and developers that denser development
of our City Center will require the inclusion 6f parking structures that would both free up
Memo to FEDRAC
City Center Redevelopment Strategies
Page 7 of 7
land currently in use as surface parking to allow for more buildings, as well as simply
accommodate the parking needs of greater develoPment densities on the existing sites.
While there may be less costly solutions for structures containing relatively small
amounts of parking (daylight basements that fit into a site's slope, portions of parking
within the foundation of a taller building, small areas where buildings can cantilever out
over parking areas, etc.), most sizable parking structures (200 spaces or greater) average
approximately $15,000/space for above-ground structures and $20-25,000/space for
below-ground structures.
Assuming that for the most part only above-grade parking structUres would be built, here
are some potential approximate costs of various sizes of parking facilities:
200 spaces $ 3,000,000
300 spaces $ 4,500,000
500 spaces $ 6,000,000
750 spaces $11,250,000
1000 spaces $15,000,000
It must be recognized, however, that freeing up land currently encumbered by surface
parking brings more income-producing land to the property owner/developer, which
helps to defray the differential cost of the parking structure. It is hoped that eventually,
as a newly developed project is fully occupied and generates increasing revenue, the
additional income would actually outweigh the increased construction costs for a parking
structure. However, that additional income may not be realized during the initial
financing period, leaving a financial gap at that time that under conventional
circumstances would not warrant construction of a parking structure. This situation
illustrates again the notion of a financial gap that the City could help to fill in order to
realize desired redevelopment. This gap could also be a temporal gap that future
projected revenues would likely fill, but that conventional financing may not account for,
in which case City participation could be viewed as "bridging" the gap rather than filling
it.
As with the ROW improvement option discussed abox~e, financing options will be
discussed more fully below.
PURCHASE OF CITY CENTER LAND
As seen in the several examples cited earlier, a common practice on the part of cities
throughout our region and around the nation is to buy strategic properties for resale to
developers of desired redevelopment proposals, usually after response to a Request for
Proposals (RFP).
Memo to FEDRAC
City Center Redevelopment Strategies
Page 8 of 7
Advantages
The principal advantage to this approach is that it can place the city in the driver's seat
with respect to attracting the specific type(s) of redevelopment it desires. By controlling
the property, the city can predetermine the high-priority uses for that site and market the
site accordingly. Whether the objectives be to increase tax b~e, reduce crime, provide
more in-city housing, spur economic activity, etc., the city's control of the property
makes the city a decisive force within the market dynamics of its local economy, not
simply a bystander.
In addition, by owning or otherwise controlling key properties, the city can be directly
involved in discussions and negotiations about potential project occupants, such as
retailers, service providers, housing developers, etc., to the extent it desires to do so, in
order to ensure fulfillment of its objectives. In that way, a city can achieve compliance
with its objectives through means other than simply regulation; for example, negotiating
more sensitive design solutions with such traditionally tough clients as national retailers
who often have cookie-cutter site and building plans.
Disadvantages
The principal disadvantage with this approach is that the city takes on the risk of owning
and selling property, not just private market developers. It is imperative, therefore, that
the city have a strong understanding of the real estate market, the housing market, and the
retail/service market, etc., before purchasing .such properties. With a strong
understanding of these markets and clear up-side potential to the investment, the risk can
be substantially minimized and the advantages can clearly outweigh the remaining
minimal risks.
Another disadvantage is that, with properties currently occupied, the city has to take on
the role of commercial landlord - at least temporarily - which some cities are not
comfortable with. In many instances it's easier for the city to vacate remaining tenant
spaces or buildings to minimize this factor.
Land Values in Federal Way City Center
The cost of land in a commercial environment is the result of a complicated appraisal of a
particular property's market performance (sales per square foot, rental rates), comparable
properties' sales prices, a site's location, etc. However, discussions with property owners
and developers in the City Center, as well as a review of recent property sales and King
County Assessor's Office valuation data, yielded the following generalized observations
about land values in Federal Way's City Center:
Vacant land:
Land w/vacant bldgs /
Land w/occupied bldgs - average tenants
Land w/occupied bldgs - above-average tenants
$8-10/sq. ft.
$15-20/sq. fi.
$25-30/sq. ft.
$30-35/sq. ft.
Memo to FEDRAC
Ci~ Center Redevelopment Strategies
Page 9 of 7
Illustrative potential purchase prices for City Center land would be:
Vacant land
25,000 sq. ft.
50,000 sq. fi.
Land w/vacant bldgs
150,000 sq. ft.
300,000 sq. fi.
Land w/occupied bldgs - average tenants
150,000 sq. ft.
300,000 sq. ft.
Land w/occupied bldgs- above-average tenants
150,000 sq. ft.
300,000 sq. ft.
$200,000-250,000
$~oo,ooo-5oo,ooo
$2,250,000-3,000,000
$4,500,000-6,000,000
$3,750,000-4,500,000
$7,500,000-9,000,000
$4,500,000-5,250,000
$9,000,000-10,500,000
PARTNERSHIP METHODS
"Responsive" Approach
One approach for partnering with private-sector developers would be for the City Council
to develop criteria defining desirable City Center redevelopment projects, identify and/or'
designate potential funding sources and strategies, and establish policies and procedures
that would allow the City to respond quickly and strategically to opportunities for public-
private partnership that might arise from the private sector.
A private developer who approaches the City with redevelopment ideas could be
informed of the City's policies with regard to City Center redevelopment and potential
financial partnership to achieve these goals. If such a developer proposed a specific
partnership concept (ROW improvements or parking facilities), the City could then set
into motion a pre-approved procedure for consideration of such a proposal in a timely
fashion.
RFP Approach
On the more proactive side, the City could develop an RFP that would be published in
trade journals and sent to developers along the West Coast (or beyond), indicating the
City's willingness and ability to partner with private-sector developers for desired City
Center redevelopment schemes. The 'notion of floating an RFP to invite prospective
developers works generally the same for the three redevelopment strategies discussed
above. The City offers up either financial contribution or City Center land as the
incentive, describes its desired redevelopment typology, develops predetermined
evaluation criteria, and advertises the RFP to the widest audience feasible.
Memo to FEDRAC
City Center Redevelopment Strategies
Page 10 of 7
Regarding potential RFP criteria, the following are some initial ideas around which
specific criteria could be developed:
· Description of desired development (mixed-use, multi-story, "village" or "life
style center" site and building design, storefronts, efficient use of land, potential
for public uses, etc.),
· LocatiOn and scope of project and its ability to induc~ ~tdditional, spin-off
development,
· Track record with similar development,
· Financial impact analysis (estimated property and sales tax increments),
· Job creation,
· Financial "gap" analysis, including development costs, projected revenue,
disclosure of developer's desired capitalization rate, internal rate of return (based
on other portfolio projects), etc. (to determine financially necessary level of
contribution)
POTENTIAL FUNDING OPTIONS
Funding Sources
The following are potential sources of funding that could be considered to finance the
redevelopment strategies discussed above:
The 1/2% utility tax dedicated to the Public Safety facility bond is projected to
generate $600-625,000 a year. That is $180-200,000 in excess of the current debt
service on the bond, which will be fully retired in 2012. The total revenue could
be used to float a bond valued at approximately $6 million, while the debt
repayment could be structured so as to use the above-cited "excess" revenue to
make interest payments on the new bond note, reverting to a more complete
amortization schedule after the Public Safety facility bond is retired in 2012 and
the full revenue stream is available.
With the move of the City Hall into the Paragon Building, the current City Hall
would be available for sale or for rent. This could potentially generate lump stun
proceeds or potential net rental income, which in either case would have a net
present value of approximately $3 million - either in cash proceeds or a bondable
rental income stream.
o
Especially with regard to ROW improvements and/or partnerships with private
developers on ROW improvements, the City CounCil could begin earmarking a
portion of yearly carry-forward funds to create a growing pool of funds for future
ROW improvements. Given the length of time necessary to accumulate sufficient
funds for more than small improvement projects, perhaps this source of funding
could be used to supplement other funding soffrces and/or to be combined with
other sources to create a revolving pool of funds (see below).
Memo to FEDRAC
City Center Redevelopment Strategies
Page 11 of 7
King County currently has $7 million available in Community Development
Interim Loan (aka "float loan") funds available for property acquisition or project
development for redevelopment projects that create additional jobs.
Requirements for use of these funds are as follows:
The HUD-imposed requirement for the use of these funds is that the
redevelopment projects to be generated create 1 new job for every $35,000 of
funds loaned, with a minimum of 51% of the jobs occupied by persons from
low- to moderate-income households. Examples of the levels of job growth
associated with loan amounts are:
$2.5 million loan
$5 million loan
$8 million loan
71 jobs
143 jobs
228 jobs
The low- to moderate-income job-creatiOn requirement would likely be
readily achievable within the Federal Way City Center, where the majority of
new jobs would likely be within the retail and service sectors -jobs typically
well within the low- to moderate-income parameters. HUD requires reporting
on such projects until such time as the approximate number of jobs created
reaches the estimate associated with the loan amount.
· Traditionally the funds have been available at 2% less than the lending rate
regularly available to municipalities. Given that current lending rates are at
approximately only 2%, it is no longer possible to achieve that 2 percentage-
point discount, so the County has stated that it will negotiate with
municipalities for a mutually agreeable interest rate.
· The City would have to issue a letter of credit against the loaned amount at a
typical rate of.75 point (or percent) of the loan amount. (For example: a $5
million loan would require a letter of credit fee of $37,500.)
· Lastly, these funds must be repaid by the municipality within 30 months of
disbursal. The timeline for approval of a loan application is approximately
three to four months, which includes County Council review and approval and
HUD oversight. The County has indicated that this source of funding is
particularly well suited to property acquisition projects 'by local
municipalities.
Lastly, especially for short-term use of funds, such as in association with a quick
purchase and "flip" of property through an RFP proc~ess, the City could simply
borrow funds. The current lending rate to the City is approximately 2%.
Therefore, a $5 million loan for one year would result in interest payments of
$100,000.
/
Memo to FEDRAC
City Center Redevelopment Strategies
Page 12 of 7
Revolving Funding Pool
As mentioned previously in this memo and discussed previously in FEDRAC meetings,
one notion that should be considered would be to create a revolving pool of City Center
redevelopment funds to finance these redevelopment strategies. This may be particularly
appropriate for the ROW improvement and parking facility p_a_rtnership strategies,
although is not precluded from the property-acquisition strategy as well. Three general
sources of funding are apparent as generators of such a revolving fund:
As mentioned earlier, any one of the partnership strategies discussed above could
be structured so as to require full to partial repayment of the City funds over time.
This determination may not be able to be made until detailed financial analysis of
a specific development's pro forma is conducted and case-specific City Council
participation decisions are made. One thing to keep in mind is that this approach
could reduce the level of perceived incentive to private developers. A variation on
this option is to consider repayment requirements in the context of the required
fmancial "gap" analysis in analyzing developers' responses to the RFP. Greater
fmancial gaps for desired development may require greater City contributions
(which may eliminate the possibility of pay-back), while smaller gaps may be
more amenable for an amortized repayment.
2. The City could earmark property and sales tax revenue increments from project
sites to help replenish the redevelopment fund.
As mentioned above, a portion of yearly carry-forward funds could be allocated to
this fund, especially for such capital improvements as ROW improvements and/or
parking facilities.
SUMMARY OF BENEFITS
In addition to achieving greater.compliance with the City Center vision embodied in the
Comprehensive Plan, several important benefits could result from City participation in
public-private partnerships within the City Center, including the following:
Increased sales and property tax revenues. Regarding property taxes, it should be
noted that, although increases in overall property tax revenues, of course, are
capped by State law, increased property tax revenue from City Center properties
would help to shift the burden away from the residential property sector and
towards the commercial property sector.
2. Increased jobs for Federal Way residents and the economic multiplier effects that
arise from those jobs.
3. Increased housing opportunities within City Center and the economic multiplier
effects that arise from those residents.
Memo to FEDRAC
City Center Redevelopment Strategies
Page 13 of 7
Additional development and redevelopment that is induced by large
redevelopment projects and a revitalizing City Center, as well as enhanced image
and profile of Federal Way within region as new investments and development
projects occur.
Greater financial and development retum on massive public investment in City
Center infrastructure to date~
6. Achievement Of Comprehensive Plan goals and Growth Management mandates.
NEXT STEPS
Staff will continue to explore and develop selected strategies and methods discussed
above, potential land acquisition sites, etc., and report back to FEDRAC, again in study
session and/or executive session, Pursuant to City Council direction at the October 28,
2003 study session.
Attached you will find a matrix WOrksheet that you may find helpful in summarizing your
thoughts, comments or questions regarding each of the strategies and related methods
discussed in this memo. Similarly, the worksheet may help you focus in on combinations
of strategies-methods you are particularly interested in pursuing further or, conversely,
would pref/~r to pursue no further.
CITY OF FEDERAL WAY
MEMORANDUM
Date:
TO:
VIA:
FROM:
Subject:
November 20, 2002 ::
Finance, Economic Development and Regional Affairs Committee
David H. Mo)et~A~ity Manager
Patrick Doyrt~/uty~irector, Community Development Services
City CenteAJ~de~qopment Tools
Pursuant to City Council direction at its October 15, 2002 meeting, staff have researched
the following: 1) right-of-way (ROW) improvement standards within the City Center, 2)
the feasibility of implementing a Community Renewal Plan and consequent access to tax-
increment financing provisions, pursuant to the Community Renewal Act, and 3)
potential City funding of ROW improvements and/or participation in a public parking
structure. Staff were requested to report back to FEDRAC with findings and seek
continued direction.
ROW Improvement Standards
City Staff focused on the City Center grid streets, identified in the Comprehensive Plan
as intended to break up the City Center's large.superblocks, since they are the rights-of-
way with the' most potential improvement remaining and the most potential to be seen as
financial obstacles to desired redevelopment of City Center properties. The intent behind
researching the grid street improvement standa/:ds was to determine whether their current
improvement standards might possibly require more than the minimum improvement
necessary and, therefore, could potentially be revised. Public Works Department staff
indicated that the improvement standards for grid streets (Roadway Cross Section Q)
were analyzed and revised downward in 1998 during the last substantive revision to the
'Transportation Chapter of the Comprehensive Plan. These standards currently describe a
70-foot right-of-way, with a 12-foot sidewalk (minimum necessary in the City Center), an
8-foot curbside parking lane, and a 12-foot travel lane in each direction. Only a very
' minimal additional reduction in these standards (e.g., a one-foot reduction in the width of
the travel lane) would be possible without compromising safety. Given that these
standards were analyzed and revised so recently, that additional reductions might impair
safety, and that minimal reductions in the improvement requirements would not
substantially reduce ROW improvement costs, staff finds that there is little to no potential
for revising the grid street ROW improvement standards and recommends that they
remain as currently detailed in the Federal Way Comprehensive Plan and City Code
Memo to FEDRAC
'November 20, 2002
· Page 2 of 2 ' .,~ ~.~:
Community Renewal Plan and Tax-Increment Financing
Staff originally recommended that study be made of the Community Renewal Act's
provisions for funding public improvements, in particular its tax-increment financing
provisions. After careful analysis of the provisions of the Act and discussion with parties
involved in draft,lng its provisions during 200 I, and in light of the City Council's stated
desire to focus only on public improvements in its City Center £e3eVelobment incentives,
· it became apparent that the tax-increment financing provisions of the Community
Renewal Act provide no additional benefit over that which the City is allowed to do
without utilizing the Act. Since the Act's provisions only allow the City portions of both
sales and property tax increments within the renewal area to be captured and used to
recoup public funding expendituyes, and since the City can earmark any increase in tax
revenue for any use it may, be legally put to, staff recommends focUsing on internal
mechanisms for public improvement funding and not utilizing the Community Renewal
Act for now.
Two general options are available with the City's existing taxing and expenditUre
authority for funding public improvements:
1)
2)
fund improvements in tandem with desired redevelopment projects,
with the anticipation that future increased property and sales tax
revenues that will accrue to the City's General Fund will eventually
reimburse the City for its expenditures, or
fund improvements in tandem with desired redevelopment projects that
demonstrate specific estimates of future sales and property tax
increments over a specified time period (say, 10 years). This option
would require detailed financial analysis of accompanying
redevelopment projects and estimates of future tax revenues. However,
this would permit the City to decide what level of funding to proVide,
based on those projections, a desired time horizon, and what level of
eventual reimbursement theCity desires (e.g., 50%, 100%, etc.).
This option also most readily allows for the creation of a public
improvement fund for which those tax increments could be specifically
earmarked as a means of creating a revolving fund to help finance
future improvements.
Altho~ugh no accurate predictions can be made of the amount o~ increased tax revenue
that a redevelopment project might generate, some idea can be garnered by looking at one
of the City Center's moderately successful shopping centers -. SeaTac Village. This
shopping center currently yields approximately $220,000 per year in sales tax revenue
and on the order of $15-20,000 per year in property tax revenue. ~lf one of the other,
~ . th
under-performing C~ty Center blocks (for example the block bounded by S. 3 l 6 and S.
tl~ rd st
320 Streets and 23 and future 21 Avenues South) Were to be redeveloped with a mix
of retail, office, lodging and/or residential uses, it is possible that somewhere on the order
Memo to FEDRAC
November 20, 2002
Page 3 of 3
of $200,000 in incremental sales tax revenue and $20,000 in incremental property tax
revenue could be generated. Improvement Of the adjacent 21st 'Avenue S. grid street
would coSt on the order of $2,000,000. City funding of, say, half of that improvement
($1,000,000) could, therefore, be recouped by incremental tax revenues within
apprOximately 5 years. One-quarter funding ($500,000) could be recouped in about 2-1/2
years. : ~
Another option in creating a revolving fund could be to subtract from such future tax
increments the approximately 3% rate of inflation in sales tax revenues that the City uses
in budget projections so as to avoid any, minimal impact to general city tax revenues that
are counted on for future General Fund balances. This. would impact the tax revenue
increment minimally and w°fild not materially change the time period for recoUPing
ROW improvement expenditures.
City Funding of ROW Improvements
Given the conclusion above that there is little to no potential for revising the grid street
ROW improvement standards, the City Council may .wish to consider the concept of
funding/partially funding grid street ROW improvements as an incentive to accompany
desired redevelopment within the City Center. Observations of local commercial
developers have indicated that extensive ROW improvements, such as those that might
be necessary in constructing a grid street might ser~e as financial obstacles to desired
redevelopment of key City Center sites.
Consequently, future potential developers might approach the City with inquiries as to
whether the City would be willing to help reduce these financial obstacles by
participating in the financing of such ROW improvements. Other cities have even gone
so far as to finance these improvements in advance of development, as an incentive to
attract desired redevelc~pment. In either case, it is preferable for the City Council to have
discussed these issues in advance of any pressing developer-driven request and have a
standing, agreed-upon policy for such potential financial participation.
As discussed above, one approach would be for the City Council to earmark a certain
amount of potential funding per biennium (e-~-, $500,000) that could be called Upon to
help fund ROW improvements in partnership with desired private-sector development.
Criteria could be formulated that would detail whether particular development schemes
would merit such public participation. For example, such criteria could focus on mixed-
use, m~ultistory developments that further the City Center vision of the Comprehensive
Plan. In addition, financial criteria could be included that require a demonstration, based
on reasonable rates of return, of what level of"gap" financing, up to a certain cap, would
be necessary for a particular development project to go forward. Additional criteria could
focus on the project's projected increase in City tax reyenue that would be generated as a
measure of determining how quickly and/or to what extent the City's investment could be
recouped.
Memo to FEDRAC
November 20, 2002
Page 4 of 4
As discussed above, the City could specifically earmark incremental sales and property
tax revenues coming from the redevelopment area to replenish this fund so that in the
long term there would be monies available to help finance other public improvements in
the City Center.
City Participation in a Public Parking Structure
Notwithstanding what appears to be a copious supply of parking on most of City Center
sites, major redevelopment of these sites would most likely yield the need for some
amount of structured parking to accommodate tenant requirements and/or demands.
Structured parking is expensive (on the order of $15,000 per stall) and can constitute a
real obstacle to desired redev610pment projects.
Similar to the above discussion regarding right-of-way improvements, the City could
choose.to partially fund a parking structure, in exchange for unrestricted public use of a
proportionate share of its park!ng spaces, asan incentive and/or assistance to a desired
redevelopment plan/project.
Three main options would be available for financing Such an investmem:
i)
2)
3)
One-time and/or-.General Fund capital funding, to be recouped through
increased sales and property taxes over a specified period of time;
Use of funds from the revolving fund for City Center public
improvements, suggested above, to which increased sales and tax
revenues would be specifically earmarked; or
Issuance of bonds to be retired by the increased sales and property tax
revenue. This option requires the greatest amoum of financial scrutiny
of a potential redevelopment project in order to be able to "bank" on the
increased tax revenue over the specified period.
An additional mechanism that should be considered would be to allow future developers
to "buy back" the City-funded parking spaces to serve the parking requirements and/or
demand for future development on or near the site of the parking structure. A developer
could be offered two options: 1) to buy the corresponding parking stalls for their sole
use, accessory to their development, to be paid for at full market rate, based on
construction/management costs, or 2) to "buy" use rights to these spaces that would also
continue to be available for general public parking in a shared-use arrangement: This
option'would likely result in a cost to the developer of less than full market rate for these
spaces. (It should be noted that the City of Auburn has employed exactly this
mechanism, after having purchased an additional floor of parking atop the Sound Transit
parking garage. They are now "selling" those stalls to new development projects to meet
their parking requirements/needs.)
/'
Memo to FEDRAC
November 20, 2002
Page 5 of 5
COMMITTEE ACTION:
Staff recommends that the Committee indicate which of the following potential
redevelopment tools should continue to be explored and developed by staff, with the
exp6ctation that draft ordinances, policies and/or procedures would be developed and
presented back to FEDRAC: =' =
1. Potential funding of public ROW improvements in conjunction with
redevelopment projects, pursuant to one or more of the following options:
a. With the expectation that future increases in City sales and property tax
revenues resulting from the projects will indirectly compensate for these
expenditures; .
b. With' the future increases in City sales and property tax revenues resulting
from the projects be specifically designated to replenish an ongoing,
revolving fund to finance future public ROW improvements. This fund
could be supplemented each biennium with additional funding or stand
alone and be replenished solely by these incremental sales and property
tax revenues.
2. Potential financial participation in a public parking structure, pursuant to one or
more of the following options:
a. One-time and/or General Fund capital funding, to be recouped through
increased sales and property taxes over a specified period' of time;
b. Use of funds from the revolving fund for City Center public
improvements, suggested above, to which increased sales and tax revenues
would be specifically earmarked; or
c. Issuance of bonds to be retired by the increased sales and property tax
revenue.
C¢)M M ITTI';I';: /
CITY OF FEDERAL WAY
MEMORANDUM
Date:
To:
Via:
From:
Subject:
September 26, 2002
Finance, Econom~pment and Regional Affairs Committee
David H. Mose/l~,Mhnager
Patrick Dohe~y,~..uty DireCtor, Community Development serVices
City Center ReXT[dv~iopment Tools
B ACKGRO UND:
Pursuant to direction from the August FEDRAC meeting, City staffhave more fully
explored and researched five of the City Center.redevelopment tools fi-om the nine then
presented for preliminary discussion. This memo provides more information and
background on these five potential redevelopment tools, which include: SEPA Planned
Action, Housing Tax Exemption, Modify Infrastructure Requirements/Build
Infrastructure Improvements, Participate in Public Parla'ng Garage, and use of a
Community Renewal Plan. You will note that ~ome of these tools require further study or
consideration before proceeding with implementation, although preliminary steps
forward can be made without fully committing to the use of any of these tools. A
summary of the City Center Market Study is also included, as it provides a valuable
source of contextual information in considering City Center redevelopment ideas and
toolS.
City Center Market Study
Because so much of the ensuing discussion about the various redevelopment tools the
City may be interested in centers on an understanding of the City's Comprehensive Plan
vision for the City Center and its relation to the forecasted market forces, it is appropriate
· to provide a summary of the market study's general conclusions.here. The market study
offered the following general conclusions:
In general, the retail/service sector will continue to be the greatest source of new
development and redevelopment in the City Center, with 533,600 additional
square feet of space forecasted by 2020.
The likelihood that office space will be developed in the City Center is weakened
by the mnple supply of land available for office development in the East and West
Campus areas and their correspondingly lower land values. For this reason, only
228,600 additional square feet of office space is forecasted by 2020.
Housing faces similar obstacles as does office development in that land values,
driven by t!~e predominant retail/serVice sector, are. generally too high for stand-
Memo to FEDRAc
September 26, 2002
Page'2 of 2
alone housing developments in the City Center. Nevertheless, there will be
continued demand for housing throughout the City during the next 20 years and
some of that housing will very likely be developed within the City Center. The
consultants offered a forecast of up to 600 additional housing units (most likely in
mixed-use developments) in the City Center by 2020.
The lodging sector Will continue to see an oversuppl~,'-for the next several years,
with demand outstriPping forecasted supply only around 2010.: After that time,
Federal Way may see additional lodging development, especially given its central
and accessible location, synergy with existing lodging facilities, and amateur
sport~-driven lodging demand. No specific number of hotel units was forecasted.
Additionally, it should be noted that within each of the above-cited sectors, the
market study includes a more detailed forecast break-down for 2005, 2010, 2015,
as well as 2020.
Lastly, the consultants stated in their presentation on 9/16/02 that the City should
not be discouraged that their market-based conclusions fall short of our
Comprehensive Plan's more aggressive Vision for the City Center. In fact, it was
stated that it is appropriate for a City to have a vision that reaches farther than
what the Unassisted market forces might natm:ally bring. The discrepancy simply
points out where the City might need to provide more incentives or regulatory
tools in order to achieve the desired level of redevelopment..
ooEPA Planned Action
In 2000 the City Council approved the funding for the planning and environmental work
associated with a SEPA Planned Action for the City Center. The City Center market
study was undertaken as a means of assisting the City in determining what level of
development should be planned for in the SEPA Planned Action. Now that the market
study has been completed and presented to the Land Use and Transportation Committee,
we may begin the scoping process for the proposed SEPA Planned Action.
Several important decisions need to be made regarding the SEPA Planned Action in order
to go forward. The following is a discussion of each of three principal areas of concern:
1. What area of the City Center to cover. While the City Center is comprised of
both the Core and Frame zoning districts, a Planned Action for the entire City
Center may be too massive an undertaking. Staff agrees with a suggestion offered
by developer and consultant Darrell Vange at the 8/20/02 City Center
, Redevelopment Brainstorming Session at the SeaTac Mall; i.e., that the City
should focus its efforts in order to optimize its limited time, money and other
resources. Consequently, staff recommends that the SEPA Planned Action be
focused on the "core" of the City Center Core zone, comprised of the SeaTac .
th th
Mall site, as well as the two "superblocks" between 320 and 316 Streets and
between Pacific Highway and 23rd Avenue. /
· How much development and of what types to cover. This will take more analysis,
but in general, staff recommends that the plan for development exceed what the
Memo to FEDRAC
September 26, 2002
Page 3 of 3
market might naturally bring without incentives or regulations. Depending on the
timeframe chosen (below), we can consult the individual break-downs of
forecasted development per sector in the market study, and decide how much
further we would like to plan for. Staff recommends that one or two working
sessions with area stakeholders be held to arrive at th__e:scope of the planned
action, both in quantity of development, as well as type of development.
Regarding type of development, the planned action should include a full range of
acceptable and appropriate development types, sizes and configurations to ensure
flexibility. However, it should explicitly be crafted to apply only to planned-for
development. That is to say, if the City envisions, say, mixed-use, multi-story or
multi-use developments, then we would not offer the benefit of the planned action
process to a one-story comanercial strip center, for example. These (and/or other)
uses would continue to be allowable and there would be no obstacle to them, but
they should not be offered the "incentive" contemplated bythe Planned Action.
What time frame to cover. The only serious issue to consider regarding the
desired time frame relates to the EIS. The longer the time frame of the
environmental disclosure and identification mitigation measures, the more work
(and money) involved in preparing the document. In addition, the modeling and
forecasting associated with the traffic analyses and accompanying mitigation
measures become more difficult. Staff recommends a time frame on the order of
10 years, with a planned update/remodeling at year 5. This does not mean that the
EIS and Planned Action would expire after ten years, but that we would plan and
analyze the impacts of a forecasted ten years' amount of redevelopment. If less
growth occurs, the Planned Action/EIS would be valid for longer. Conversely,
adding to the ElS would not be such a large undertaking as starting anew, but
would require some new work at that time.
Staff will be discussing the SEPA Planned Action and these issues with LUTC in the next
few weeks.
I~ousing Tax Exemption
The li~nited property tax exemption for multifamily housing in the City Center is still
under consideration by the City Council. Earlier this month, the City Manager and staff
concluded efforts conducted over the Summer to meet and discuss the proposal with the
other taxing jurisdictions included in this action: Federal Way School District, King
County Library and Federal Way Fire District.
Key among these constituents' concerns was the potential demand for service during the
period when the property would yield less tax revenue. Pursuant to staff research, two
key discoveries were made:
Related to School District demands. Staff foui{d that school-age children
comprise on average only five percent o~f residents in new city-center multifamily
buildings in other suburban downtowns (Renton, Bellevue), compared with ~nuch
Memo to FEDRAC
September 26, 2002
Page 4 of 4
higher percentages from older multifamily buildings in the neighborhoods. As a
result, even with a partial tax exemption during the initial 1 O-year period, city
center mixed-use/multifamily buildings would likely yield tax revenues per
student of up to 20% greater than the per-student tax revenue resulting from older
multifamily buildings in.the neighborhoods. This is due to the substantially lower
student-per-unit ratio in these potential city center btiiRtings and the tax revenues
coming in associated with the higher land values and value of the first-floor
commercial space in mixed-use buildings.
2. Related to Fire District demands. Staff interviewed Fire Department personnel
from Renton and Bellevue to ascertain the. level of demand for service for newer
(under 10 years old) mixed-use and multifamily buildings in urban centers. Both
empirical and anecdotal information yielded the conclusion that demand for fire
and emergency medical services was .noticeably lower for market-rate multifamily
buildings in urban centers during the first ten years than for older buildings in the
neighborhoods. These observations corroborate the premise that these new
buildings, with higher rents and in more urbanized locations, draw more stable
tenants, willing to pay top-of-the~market rents, such as young
professionals/couples or recent retiree~ - populations less prone to fire or medical
emergency situfitions otherwise more frequently seen among lower-incbme
populations or househo~lds with children, such as s~noking- or space heater-related
fires or medical- or accident-related emergencies associated with children.
What's more, these new buildings are of new construction with generally state-of-
of-the-art wiring, plumbing, fire detection/suppression equipment, etc.
In addition, input from area developers has been positive. Two developers remarked that
the yearly savings (on the order of $70,000/year for a $7,000,000 project) constitute
about 10% of a developer's'desired yearly operating income of about $700,000 - a
substantial incentive. In light of the above-cited city center market study conclusions
that, given higher land costs, potential need for structured parking, and lower average
rents, multifamily housing will be slow to come to the city center, incentives such as this
will be needed to attract this type of deveiopment.
Not to be ignored is also the fact that many of the surrounding communities have already
enacted this provision (e.g., Tacoma, Kent, Renton, Seattle), and Federal Way should do
what it can to remain competitive in the region. Failing to enact this provision may send
a tacit message to the development community that this city is not interested in
redeyelopment - clearly not the position the City has taken.
To conclude, staff believes the benefits of the housing tax e,xemption proposal
substantially outweigh any perceived costs. The tax exemption proposal is slated to be
brought back to the City Council for consideration this Fall, and staffwill offer further
detailed support for its approval at that time. Because,.the November 6, 2001 public
hearing regarding designation of the "residential targeted area," pursuant to RCW
requirements, did not include sufficient public notice, the City Council must hold another
Memo to FEDRAC
September 26, 2002
Page 5 of 5
such hearing. However, after closing this additional hearing, the "residential targeted
area" may be designated and the code provisions may be approved at that very same
Council meeting, if'the Council so wishes.
-Modify Infrastructure Requirements/Build InfrastructUre Improvements
As evinced from developers' comments over recent years, as well as mentioned at the
8/20/02 SeaTac Mall/City Center Redevelopment Brainstorming Session, right-of-way
improvements can be a substantial burden for developers, especially in Federal Way's
City Center, where new "'grid streets" are required. Two approaches to reduce this
burden were discussed: .....
1. Modify Infrastructure Requirements. Under this approach, City staff(Public
Works and Community Development) could do a more detailed study of the
relationship between the codified right-of-way (ROW) improvement standards
and every proposed grid street or other proposed ROW improvement, with the
intent of finding any potential locatiOns where the improvement standards can be
lessened throughout the City Center for these proposed grid streets. Examples
might be narrower overall ROW width, narrower roadway width, etc. Similarly,
study could be made of the need for two-thirds ROW improvement when only
one abutting property owner is making the improvement. This requirement shifts
more burden on the one abutting property owner, with no certainty about late-
comer's reimbursement. Or if, the full two-thirds improvement is truly necessary
for circulation purposes, perhaps the City could fund the difference between the
abutting property owner's half-ROW obligation and the two-thirds improvement
(see below).
Staff recommends that further study be made of the potential for any modification
to ROW improvement standards that could lessen this burden to developers, while
still maintaining necessary ROW functionality.
City Build/Fund Infrastructure Improvements. Recognizing that incentives may
be necessary to attract desired redevelopment, the City may find it beneficial to
fund or contribute to the funding of selected ROW improvements. (See
comments under Community Renewal Act for related discussion and additional
funding options.) Two general approaches could be considered:
Identify a focused redevelopment area and fund/partially fund key ROW
improvements and/or missing links in that area as incentive to
redevelopment; or
Offer potential funding/partial funding of ROW improvements associated
with preidentified, desired redevelopment (especially in conjunction with
community renewal plan, discussed below under Community Renewal
Act).
Memo to FEDRAC
· September 26, 2002
Page 6 of 6
Staff recommends further study of these optiOns, .partiCularly associated with any
potential work to implement a community renewal plan.
Participate in Public Parking Garage
Given that the supply of parking might become a serious obgt~cle to desired
redevelopment of the Mall site (or likely other sites, as well), the requirement for some
amount of structured parking will likely present itself. Parking strUctures, howeVer, are
expensive, with current cost estimates rUnning on the order of $12-15,000 per parking
stall. Most developers in the Federal Way market would shy away from redevelopment
schemes that include the cost burden of a substantial amount of strUctured parking.
Conversely, assisting in the financing of a parking garage has been characterized as the
single best way of capa¢itating desired redevelopment of key sites, such as the SeaTac
Mall.
The City's participation in such an endeaTeor would necessarily have to result in.public
benefit and usage of at least a proportionate shoe of the parking spaces. But, given that
most, if not all, users of such a facility would likely be visiting the associated
redevelopment site, this should not be .perceived as an obstacle by an associated
developer.
One interesting approach has been used in the City of Santa Monica. That City has
financed and constrUcted public parking garages throughout its downtown and then
exacted reimbursement on a p~r,stall basis from developers according to their parking
requirements and/or demand. This is feasible because on-site parking is not allowed in
downtown Santa Monica, so the parking garages essentially become{he off-site parking
supply for individual establishments' throughout the downtown.
A variation on this approach could be considered fOr Federal Way, wherein developers of
future projects could "buy" use of parking spaces from the City within any publicly
funded parking facility to capture all or part of their parking reqUirement/demand. A
developer could be offered tWo options: 1) to buy the corresponding parking stalls for
their sole use at full market-rate based on construction/management costs, or 2) to "buy"
use rights to these spaces that also be available for general public parking in a shared-use
arrangement for somewhat less than full market rate. Again, especially for a developer
facing the prospect of constructing a parking strUcture in certain development scenarios,
an alternative such as this could soften the blow of the costs of structured parking.
There are essentially two approaches related to this redevelopment tool: 1) the City could
build a parking garage to serVe (a) key redevelopment site(s) with or without partial
reimbursement as redevelopment occurs, or 2) the City, after careful legal analysis, may
be able to offer financing/partial financing of a parking facility as a companion to
targeted redevelopment projects, pursuant to a conunjanity renewal plan and/or SEPA
Plmmed Action.
Memo to FEDRAC
September 26, 2002
Page 7 of 7
Staff recommends that both of these approaches be studied further, including potential
funding plans and implementation strategies, to be brought back to FEDRAC for
discussion and potential action.
Community Renewal Plan
Pursuant to RCW )5.81 (Community .Renewal Act), a municipality may create a
community renewal plan for areas it designated as "blighted." Many criteria are listed as
qualifying for "blighted," including "inapproPriate uses of land or buildings," "defective
or inadequate street layout," and "faulty lot layout in relation to size, adequacy,
accessibility or usefulness." 'These three criteria seem particularly pertinent.
With a Comprehensive Plan vision of a multi-use city center containing mid- and high-
rise, mixed-use buildings housing commercial, residential and public/institutional uses,
the current City Center land use pattern may somewhat easily been deemed
"inappropriate." Approximately two-thirds of the land area is consumed by parking lots,
and most of the remaining land dedicated to single-use, one-story buildings. In addition,
there are substantial vacancies within the core of the City Center. Therefore, it seems .:
quite feasible that the City could conclude that at lea:st the core of the City Center Core
zone (between 316th to 324th Streets and 23rd Ave and Pacific Highway) exhibits
"inappropriate uses of land or buildings" vis.-fi-vis our Comprehensive Plan vision.
Similarly, this same area exhibits a pattern of very large superblocks and correspondingly
large land parcels. While some communities may face hurdles in achieving desired'
redevelopment due to multiple property ownership of many small parcels, another hurdle
· can be excessively large parcels that can be difficult to sell to developers interested in
smaller projects or who cannot finance the purchase of very large sites. For this reason, it
may be possible to conclude that the City Center also exhibits "faulty lot layout in
relation to size, adequacy, accessibility or usefulness."
Lastly, as detailed in the Comprehensive Plan, the City Center lacks sufficient improved
roadways to alleviate traffic congestion, improve accessibility and visibility to abutting
property and commercial establishments, and break down the superblocks to create a
more pedestrian-friendly walking environment. It is for this reason that the
Comprehensive Plan includes a layout of the potential future "grid" streets.
Consequently, it is quite reasonable for the City to conclude that the City Center exhibits
"defective or inadequate street layout."
In short, although further study and consideration of these p~rovisions are necessary, staff
believes that at least the above-described comof the City Center Core zone may meet the
definition of"blighted area," pursuant to the Community Renewal Act and should be
considered for a co~nmunity renewal plan.
/;
A community renewal plan, including public input and involvement pursuant to the
RCW, would be a natural outgrowth of our Comprehensive Plan vision and could go
Memo to FEDRAC
September 26, 2002
Page 8 of 8
hand-in-hand with the planning efforts associated with the above-mentioned SEPA
Planned Action.
Once the community renewal plan is approved, the City may consider participating
financially in improvements or projects that fulfill that plan. These projects can range.
from the above-cited ROW improvements or participation ir/:~i parking structure to direct
financial participation or loans to projects to "develop, expand, or retain land uses that
contribute to the success of the...plan," and "to provide incentives to property owners
and tenants to encourage them to locate in the COmmunity renewal area." The Act calls
out a preference for projects that "will create or retain jobs, a substantial portionof
which, as determined by the municipality, shall be for Persons .of low income." Given
that the main edonomic engine of Federal Way~s citY Center are retail and s~rvice
establishments, and future redevelopment projects will likely continue to build upon this
sector, it is. probable that most new jobs associated with redevelopment projec/s in the
City Center may continUe to be in the retail/service sector and would, therefore, meet this
criterion.
Lastly, a partic~ularly attractive component of the Community Renewal Act is that it
includes a form of tax-increment financing for the community renewal area that includes
both property and sales tax. In short, this mechanism directs any increment in tax
revenues over the baseline year to a fund to pay back the City for any expenditures made
pursuant'to the plan. The inclusion of sales tax revenue is particularly helpful, given that
so much of the City Center is retail/service based and generates a great deal of sales tax.
In addition, sales tax revenues are not capped, as property tax revenues have been by
recent initiatives. It should be noted that the Act allows for only the City portion to be
captured unless other jurisdictions agree to participate with their corresponding portions,
but this is still an important potential source of funds to help offset any expenditures the
City-may make .in its endeavors to attract or accompany desired redevelopment.
It should be noted that certain provisions of the C0rmnunity Renewal Act deal with issues
that previously have raised .concerns over limitations imposed by our State Constitution.
Use of these provisions would require careful legal analysis. Therefore, staff
recommends that the City continue to explore the legal ramifications of using this key
redevelopment tool and, barring serious legal obstacles, proceed with a community plan
in tandem with the planning efforts associated with the SEPA Planned Action. Once the
plan is done, the City Council can then decide whether to adopt the plan pursuant to the
Community Renewal Act.
COMMITTEE ACTION:
Staff recommends that the Committee:
Memo to FEDRAC
September 26, 2002
Page 9 of 9
o
Forward to LUTC it support for focusing the SEPA Planned Action for the
City Center Core on the area described by South 316th and 324th Streets and
Pacific Highway South and 23rd Avenue South.
Forward the Housing Tax Exemption proposal .back to City Council for a
public hearing on the "residential targeted area," .as_ required by RCW,
followed, by action on the designation of the "resi~i~ntial targeted area" 'ttnd
action on the corresponding code amendments.
Direct City staff to conduct further of the potential for any modification to
ROW improvement standards within 'City Center Core, or specific areas
therein, that could lessen this burden to developers, while still maintaining
necessary ROW functionality.
Direct City staff to identify key ROW improvements and/or missing links as
potential incentives to redevelopment and conduct further study o£ the
potential for funding/partially funding these improvements.
~ Direct City staff to study further the two approaches discussed above for
potentially fu.nding or partially funding a public parking garage in the City
Center, including.potential funding plans and implementation strategies, to be
brought back to FEDRAC for discussion and potential action.
Direct staff to continue to study the potential for and legal rdmifications of
implementing a Community Renewal Plan and, barring serious legal
obstacles, proceed with a such a plan in tandem with the planning efforts
associated with the SEPA Planned Action.
AI'PI{()VAI, I;Y
COMM IT:i~I.;E:
(.,¢imii;-ttce (..:hair
MEMORANDUM
TO:
FROi~I:
RE:
DATE:
FEDRAC Members
Patrick Doherty, Deputy Director, Community Development Services
CITY CENTER REDEVELOPMENT IDEAS & 8/20 WORKSHOP
August 22, 2002
Pursuant to direction from the July FEDRAC meeting, City staffhave held internal
working sessions, conducted research, and the City-Chamber Economic Development
Committee cosponsored a SeaTac Mall/City Center Redevelopment Brainstorming
Session on 8/20/02, assisted by an urban redevelopment consultant. The goal of
FEDRAC and these activities has been to elucidate any and all tools/ideas available to the
City to help foster desired redevelopment of City Center properties, including the SeaTac
Mall.
Below is a list of ideas generated by staff, together with comments and responses (in
italics) from both the urban development consultant and the attendees at the 8/20/02
Brainstorming Session. The list is complemented by an additional set of notes and
comments about other issues.
SEPA Planned Action. Under this approach the City does the EIS upfront for an
anticipated level/mix of redevelopment (including altematives), approves a
"plmmed action," and thus allows applicants of anticipated development to get a
substantially expedited permit without going through environmental or other
appealable land use approvals.
21 great idea that developers would really welcome, as long as it includes
flexibility, multiple 'development scenarios, and mitigation measures and costs
identified up-front
Itousing tax exemption. If approved by City Counc~il, would exempt new
residential construction from City property tax for ten years.
Could be a very attractive incentive to housing developers. Given the example of
approximately $ 70, 000 in tax relief for a $ 7, (/00, O00' residential project, that
could equal on the order of l O% of the desired annual operating income of
Memo to FEDRAC
August 22, 2002
Page 2 of 2
approximately 10% ($700, 000) on the investment. This is a substantial figure that
developers wouM respond to.
Waive development fees. Under this approach the City could waive development
review fees for desired development types -ranging ~om land use to building
permit fees. Given the relatively low cost of these fees vis-g-vis the total
development costs, their benefit to the developer may not outweigh their cost to
the City in person-hours. It also may raise equal protection questions.
Although this idea has great "PR" value and could impress upon some
developers and property owners'that the City is committed to its objective to
foster redevelopment of the City Center, the actual economic impact of waiving
these fees is minimal. Land use and building fees typically are less than one-half
of one percent of the overall construction budget.
Waive mitigation fees. Under this approach the City could waive fees for
mitigating certain development impacts, but this would likely only work if the
City itself were intending to pay the mitigation fee and/or perform the mitigation
of identified environmental impacts. As mentioned by the Brainstorming Session
attendees, this, too, could raise equal protection issues.
Waiving mitigation fees can have a more substantive impact on the development
budget and be seen as a real incentive to most property owners/developers. It
may, however, raise concerns within the community from other property
owners/developers. Again, the mitigation would have to occur one way or
another, so with waiving the fees, the City may have to foot the bill.
Waive utility taxes. The only tax that the City could waive in the City Center
Core or other designated area would be the utility tax. This could serve as an
incentive that developers could use to lure tenants - be that residential or
commercial - which could, therefore, potentially affect developers' interest in
City Center redevelopment opportunities.
It was felt that this would not be a great inducement to most develOpers, unless
they were specifically targeting potential tenants who are big users of utilities and
might see that as an incentive to locate within a new development.
Reduce infrastructure requirements/Build htfrastructure improvetnents. Under
this approach the City could either reduce the design,requirements for identified
grid streets (e:g., narrow streets, allowing private drives to qualify, etc.) OR
cmnmit to constructing desired ROW improvements itself.
This was seen as One of the most significant in~centives that the City could offer.
Developers typically respond quite enthusiastically to this kind of "partnering"
with local municipalities. Given the not-insignificant burden that constructing
Memo to FEDRAC
August 22, 2002
Page 3 of 3
o
portions of the City Center grid street system might have on a particular
dev.elopment, this could be a real bonus. Within the Mall property itself, the
circular, internal "ring road, "contemplated in the Comprehensive Plan might be
able to have lesser width/improvement, requirements than normally required
elsewhere in the City as a similar incentive.
Build public parking garage, Given that the supply of parking might become a
serious obstacle to major redevelopment of the Mall site (or possibly other sites),
the requirement for some amount of structured parking may present itself. If the
City were to fund/contribute to such a parking facility, it would remove or lower
that potential obstacle.
Similar. to the previous tool, the City's conStructing or participating in the
construction of ci parking garage Could be seen as a S eri°'us and attractive
"partnering" tool by developers. Notwithstanding what appears to be a large
amount of parking at the Mall, most of that parking is allocated to one tenant or
another, and new buildings or substantial expanSionS would displace parking that
WouM have to be replaced Replacement wouM almost invariably have to come in
the form of some structured parking. So; City partiCipation in this endeavor
would be not only a significant contribution but also couM capacitate more
ambitious redevelopment schemes. This idea was characterized as one of the best
ways to help the economics o fa project. There was a note of caution, however, in
that parking garages require careful financial study in order to be successful.
Some communities have succeeded With them and others have run into troubles.
Landpurchasedassembly. Through direct purchase, the City could assemble,
permit and/or supply infrastructure and ROW improvements to parcels that then
could be sPecifically marketed to developers for desired development. This is
what the Cities of Renton and Tukwila have done to attract redevelopment.
Although other communities have done this and are doing this currently, land
purchase and assembly can be difficult, especially if there are multiple property
owners and/or existing lease obligations. Of course, that is precisely the burden
that a municipality may be attempting topee potential developers from - as an
inducement. In a focused community redevelopment effort, this can be a very
successful tool (see comments below about 'focusing efforts. ")
Loans and/or other financial assistance (through community renewal plan).
Given Washington State constitutional restrictions, the City cannot simply give
public money over to a private project, unless said project area meets the criteria
for a community renewal area and a community renewal plan is implemented
(RCW 3 5.81). Many criteria are li~ted, including "inappropriate uses of land or
buildings" and "defective or inadequate street/layout" that could apply to the Mall
and City Center Core properties. Down-side is that this is a new, untested
provision and we would have to work hard to create a squeaky-clean record.
Memo to FEDRAC
August 22, 2002
Page 4 of 4
Note on Community Renewalprovision: This tool also allows a type of tax-
increment financing wherein the city's increment of property tax and sales tax
within the community renewal 'plan area may be used to retire any bonds used to
finance infrastructure or specific redevelopmeTM proj _et. ts. Other jurisdictions may
contribute their portion, . but woUld be unlikely to do ~6 unless they see a benefit.
One.potential way King County might see a benefit and might, therefore, attract a
portion of their sales tax increment would be to document that a new,.redeveloped
mall/city center would cater to some portion of our residents who now shop in
Pierce County/Tacoma Mall, etc.
With the right public process' planning and focus, a community renewal plan can
be very successful, especially if it can access/leverage some tax increment
financing tools. This n'ew legislation should be seriously cOnsidered, est~ecialIy if
the City is interested in performing anY of the right-of-way improvements or
participate in constructing a parking garage.
Other Comments/Ideas:
The consultant opined that Federal Way's demographics and location are strong
and should provide a more successful mall/retail store. The combination of the
d. emographics, location and size of the Mall allows for a greater potential,
especially if structured parking is included.
The consultant noted that a successful city center requires a mixture of uses, not
just retail. He indicated that housing is truly a key to an active city center because
housing places people, with wallets, on the streets during all hours. Additionally,
the added population increases safety as more "eyes on the street" are available.
The consultant also mentioned that the City should remember that itis a real
estate developer. City facilities can substantially impact the city center,
regardless of the type of structure (i.e. city hall, community center, performing
arts facility, sports facility, etc.). He shared the dilemma Port Angeles is currently
facing of having moved city facilities to a site 0utside'the downtown area, which
is now experiencing a reduction in business. As a result, Port Angeles is
analyzing what is necessary to e .a?urage/help development in the downtown
area.
Because of limited public ffii~ds and planning/public process capacity, the City
may want to consider adjusting the initial efforts to achieve City Center
redevelopment by focusing on smaller, more manageable subareas within the City
Center. For example, focus efforts for residential deyelopment on areas where
residential development is most likely to occur. The consultant suggested the
"northern" frame area with potential because there housing already exists and
because it is an area with nice views. An example of commercial redevelopment
could focus on the "quadrant" around the pro.~osed Sound Transit facility, the
Mall and/or Mall and properties north of 320~'~. The City could do a block-by-
block analysis of potential areas
MemO to FEDRAC
AUgust 22, 2002
Page 5 of 5
· The community should not perceive that the SeaTac Mall should be in
competition with Southcenter or Tacoma Mall, It isn't. It should find its own
market niche and cater to that. The Mall representatives said it could be further
developed.as a "lifestyle center," such as University Village.
· The preliminary proposal being worked.on by staff to require housing or office or
multistory development together witk,large commerc-i~il developments should be
sure to include flexibility. Housing atop certain big,box retailers may not be
feasible, while housing atop other types of commercial may work~ Perhaps the
code provision ought to include an optionthat allows housing elsewhere on site.
· The consultant mentioned that, above all, a developer is looking for predictability,
consistency, timeliness, stability and "no surprises" .in the permitting system.
This can-go even further than some smaller financial incentives (such as waiving
permit fees) in,partnering with developers. '. .
· Attendees brought Up the related notions that interpretatiOnofzoning provisions
needs to be consistent, as.well as the idea thatperhaps a permit coordinator or
problem-resolution coordinator could exist within Community Development.
CHAPTER SEVEN - CITY CENTER
7.0 INTRODUCTION
Federal Way's City Center chapter presents concepts and strategies for creating a
definable and vibrant "City Center" for Federal Way and an "urban center" for Southwest
King County in the Federal Way City Center planning area. The chapter integrates the
community's vision for a City Center with the Puget Sound Regional Council's (PSRC)
adopted VISION 2020 plan, and King County's countywide strategy for developing a
network of centers.
In this chaPter, the term "urban center" is used consistent with the VISION 2020/King
County definition, or to refer to the general characteristics of a sub-regional center. The
term "City Center"applies specifically to Federal Way's proposed center, which includes
a City Center core area and frame area. Only the City Center core area is intended to meet
the requirements of an urban center, in accordance with the Countywide Planning
Policies (CWPPs).
Purposes
The principal purposes of the Federal Way City Center chapter are to:
· Create an identifiable downtown that is the social and economic focus of the City;
· Strengthen the City as a whole by providing for long-term growth in employment
and housing;
· Promote housing opportunities close to employment;
· Support development of an extensive regional transportation system;
· Reduce dependency on automobiles;
· Consume less land with urban development;
· Maximize the benefit of public investment in infrastructure and services;
· Reduce costs of and time required for permitting;
· Provide a central gathering place for the'Community; and
· Improve the quality of urban design for ali developments.
Background
The VISION 2020 Plan (1995 update), Regional Goal #1 states, "Locate development in
urban growth areas to conserve natural resources and enable efficient provision of
services and facilities. Within urban growth areas, focus growth in compact communities
and centers in a manner that uses land efficiently, provides parks and recreation areas, is
pedestrian-oriented, and helps strengthen communities. Connect and serve urban
communities with an efficient, transit oriented, multi-modal transportation system." King
County's CWPPs support this goal by encouraging:
A
· Establishment of an urban center that ns a vibrant, unique, and attractive
place to live and work;
FWCP- Chapter Seven, City Center
· Efficient public services including transit; and
· Responding to local needs and markets for jobs and housing.
The CWPP$ define urban centers as concentrated, mixed-use areas, a maximum size of
11/2 square miles (960 acres), and oriented around a high capacity transit station. At build-
out, the policies envision that the center would cont,/iff a minimum of 15,000 jobs within
1/2 miles of the transit center, 50 ~employees per gross acre, and an average of 15
households per acre. The urban center policies also call for:
· Adopting regulations which encourage transit use and discourage the use of
single-occupant vehicles;
· Emphasizing the pedestrian features and promoting superior urban design;
· Providing sufficient public open spaces and recreational opportunities; and
· Uses that provide daytime and nighttime activities.
The CWPPs recognize that with this growth will come an increased need for.
infrastructure. The policies, therefore, indicate that priority will be given to ensure the
development of additional transportation and other infrastructure improvements
necessary to support new, concentrated growth in urban centers.
During a series of community workshops held in 1992 and 1993 (which are described in
chapter one), participants helped to develop a "vision" for Federal Way's future. This
vision included the creation of a City Center. With the support of the residential and
business community, Federal Way nominated itself to contain an urban center.
Nominations were reviewed by the Growth Management Planning Council (GMPC),
which confirmed the Federal Way City Center core area as an urban center in 1994. The
urban center designation should help Federal Way continue to gain access to County
funds needed to provide infrastructure as the City Center grows.
The Role of the City Center in Federal Way's Future
There are several reasons why a definable, vital City Center is an important part of
Federal Way's future. These include:
Community Support - The Federal Way community has made the City Center a significant
part of its vision. Participants in community workshops helped to develop a vision for
Federal Way's future. A keystone of that plan is an attractive, multi-faceted City Center
providing the setting for civic features and commercial activities.
Economic Development - Federal Way's economic development strategy relies on a strong
urban center. As discussed in the Economic Development chapter, Federal Way has the
opportunity to transform itself from an essentially residential and retail based economy to
an emerging, sub-regional economic center with an expanded, more diversified
employment base.
/
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VII-2
FWCP- Chapter Seven, City Center
Natural Evolution - The development ora more intensive, multi-use urban center is a
natural step in Federal Way's evolution. Most new centers start out as bedroom
communities. Retail businesses develop first; office and industrial activities next begin to
locate at key transportation crossroads, adding jobs and strengthening the employment
base. Federal Way has experienced all evolutionary phases, with the exception of one.
The final step is achieving a sufficient critical mass in the City Center to produce liveJ3)
street activity; support specialty business, cultural/entertainment facilities; justify the
investment for public parks, amenities, and improved transportation systems; and create
the interactive "synergy" of a true urban center. Federal Way's economic development
strategy will add this final essential step in this evolution.
Growth Management - Developing a City Center is part of a regional str. ategy to address
Western Washington's growth management. Public policy makers have focused
increased attention on issues affecting our quality of life, including urban sprawl and the
accompanying reduction of open space, declining housing affordability, and increasing
traffic congestion. As stated previously, concentrating future growth within the four
county region into a number of centers (rather than a continued pattem of dispersion),
linked by an efficient high capacity.transit system, is one of the principal goals to manage
this growth.
7.1 EXISTING CONDITIONS
City Center Planning Area
The City Center planning area, consisting of the City Center Core and Frame zones, is
approximately 414 acres in size and is bounded by South 312th Street, South 324th Street,
Interstate 5, 11* Place South, and 13th Avenue South (see Maps VII-1 and VII-2, maps are
located at the end of the chapter). The City Center Core and Frame areas are 209 and 205
acres, respectively.
General Image
The City Center does not currently present an identifiable sense ofa downtown or urban
center. The existing commercial development within the study area is typical of suburban
strip retail and mall development. The dominance of mass retailing has largely shaped the
commercial core. The SeaTac Mall and spin-off retail centers are a local and regional
destination and generate great amounts of physical and economic activity. However, as is
the case with most older suburban mall areas, there is little, if anything, distinctive or
unique about the existing City Center. Essentially, it could be anyplace. It is similar to
hundreds of other commercial centers across the country. The businesses do not connect
to each other, or to public and private spaces, residential neighborhoods, or civic uses,
except by automobile. Development essentially reflects one pattem: a single story of
"light" construction, surrounded by an apron of asphalt. Buildings feature concrete, or
concrete block walls, creating austere and "ge~peric' images.
Revised 2002 VII-3
FWCP- Chapter Seven, City Center
Another prevalent image of the area is the vast amount of surface parking. The
availability of parking is essential to the current type of retail found in Federal Way. City
Center businesses serve regional as well as local markets, and are heavily oriented to
access by automobile. Actual building footprints relative to total parcel areas are quite
small; the majority of most parcels are used to provide'surface parking. This parking isr'
often underutilized, except during the peak holiday season.
The current network of collectors and arterials, and the disjointed over-sized block grids
within the existing commercial area, contributes to significant traffic congestion. The
character of the street environment is also unfriendly to pedestrians in many locations,
with few amenities such as landscaping, lighting, benches, etc. In addition, in many
locations the pedestrian experience is made even less attractive as little more than parking
lots or blank walls line the sidewalks. Recent improvements throughout the City Center,
most notably along South 320th Street, have improved the character of some streetscapes
with handsome streetlights and trees. Continuation of these improvements along Pacific
Highway South and elsewhere throughout the City Center will do much to improve the
overall character of the City Center streetscapes. Similarly, the extensive abatement of
unattractive, out-of-scale signage, achieved over the past five years, has also led to a
more attractive, human-scale streetscape.
The City Center does not contain a significant residential population. Pockets of
residential housing exist between South 312th and 316th Streets, and SR-99 and I-5.
Figure VII-1 (page 5) depicts an aerial view of the City Center area looking south from
the northwest comer of the City Center boundaries.
Physical Conditions
Land Use
Most of the study area is currently developed and consequently, most new development
in this area will displace existing low intensity uses. Buildings are dispersed throughout
the area and lack pedestrian connections to each other and public rights-of-way. Current
land use patterns favor auto-oriented commercial activity. The primary use in the City
Center area is retail/service, followed by lodging, office, and residential. SeaTac Mall is
the "signature" development in the area.
Table VII-1 (page 5) lists the amount of land use development by gross floor area within
the City Center planning area as of January 2002. Public and civic uses are scarce, with
only four publicly owned non-park sites (the Federal Way School District's bus bam site
north of 1 Ith Place South and South 320th Street; Truman High School, northwest of
South 317th Street and 28th Avenue South; King County Library, 848 South 320th Street;
and the School District's Administrative Offices, 31405 Pacific Highway South).
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FWCP- Chapter Seven, City Center
Figure VII-I
Aerial View of City Center
Table VII-1
Gross Floor Area of Land Uses - City Center, January 2002
Use Total Square Footage # Units # Rooms
Office 225,456
Retail 2,734,842
Hotels 369,377 655
Movie Theatres 67,730
Light Industrial* 110,339
Institutional 55,224
Single Family 980 1
Multiple Family / 891
* ministorage facilities and service buildings
VII-5
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FWCP- Chapter Seven, City Center
Parks and Open Space
There are no truly public spaces within the City Center. Private green spaces, plazas and
public meeting spaces are few. Steel Lake Park to the northeast and Celebration Park to the
southwest are on the perimeter of the City Center. Even though these parks are within
walking distance of the City Center, they also serve as regional facilities in addition to
serving local needs.
Civic Buildings and Municipal Facilities
Similarly, the City Center lacks significant civic or municipal facilities, with only the
Public Library near the periphery of the City Center. The next closest facility is the City
of Federal Way Parks Department's Steel Lake Annex and Maintenance Facility near
th rtl
South 312 Street and 28 Avenue South. Klahanee Senior/Community Center and City
Hall are located a few miles southwest of the City Center at 33901 9th Avenue South and
33530 Ist Way South, respectively.
Circulation
Roadways - A key element defining mobility within the City Center planning area is the
enormous size of its blocks. Most U.S. downtowns have blocks ranging from 250 to 500
feet on a side; block lengths in Federal Way are several times that. Because of the
"suPerblock' configuration, motorists drive between and within parking areas serving
City Center developments to avoid congestion along City streets and pedestrian
circulation is discouraged.
Access to the area is provided by two principal arterial routes: South 320th Street (which
runs east/west and connects to I-5), and SR-99 (which runs north/south). An inefficient
hierarchy of streets feed these arterial roadways. The area lacks a system of minor arterial
and smaller collector streets that could diffuse traffic efficiently away from these two
principal arterials. The irregular spacing of traffic signals also adds to congestion. As
such, the accessibility provided by the juncture of these routes, initially attractive to area
residents, has been lost due to growth in traffic.
· Transit Service - Eighteen transit and dial-a-ride routes radiate from the City Center.
However, service to the entire City Center is not the primary focus, especially during the
peak periods of the day as there are only 12 all-day routes. A regional park and ride lot,
located southwest of I~5 and south of South 320th Street, generates most of the area's
transit ridership during peak periods of the day. King County/METRO, Sound Transit~
and Pierce Transit serve this site.
Congestion on I-5, South 320th Street, and SR-99 demonstrates the need for an enhanced
transit system. However, the existing low intensity and dispersed land use patterns will
not support significant increases in transit service. The area also lacks transit facilities
such as bus pullouts and waiting areas, and a pedestrian network to safe and direct access
from transit stops. The proposed 317th direct access romp for Sound Transit's Federal
Way Transit Center will improve regional transit speed and reliability because transit will
be able to access the city center without using the congested I-5/320th interchange. It will
also benefit carpools and vanpools.
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FWCP- Chapter Seven, Ci~ Center
Pedestrian Environment and Bicycle Facilities - A 1992 inventory of existing sidewalks
within the City (see page V-22 of the Community Profile, Feb. 1993) revealed a
deficiency of pedestrian facilities Citywide. The central core was highlighted as one of
the areas that lacked an adequate pedestrian network. For example, most of SR 99 and
portions of 324th Streets and 23rd Avenue South lacked'sidewalks. A majority ofwalkihg
that does take place in the study area occurs within malls and along storefronts of
shopping center strips. Sidewalks connecting storefronts to public waikways are lacking.
The few sidewalks that did exist were narrow, devoid of trees, and interrupted by
'numerous curb cuts. Crossing wide, busy streets such as South 320th Street and SR-99 can
also be intimidating.
There are few places to sit and enjoy pleasant weather, meet friends, or have lunch
outside. The current pedestrian environment is unfriendly and unappealing. The division
that exists between pedestrians and auto areas is not conducive to establishing the active
street life desired in a City Center.
Bicyclists have even fewer facilities to choose from. City streets lack striping or signage
for bike riders who must share the road with heavy volumes of traffic. Once bicyclists
reach the area, they become frustrated by the lack of safe storage facilities for their
vehicles. Covered bike parking will be provided at Sound Transit's Federal Way Transit
Center.
Residential
The City Center contains approximately 892 units of housing (listed in Table VII-I),
located primarily in the area east of SR-99, south of South 312th Street, north of South
316th Street, and west of 28th Avenue South. Other residential neighborhoods surround
the City Center area, such as the pockets of multi-family housing west of South 11th Place
and south of South 320th Street. There are also single-family neighborhoods west of
Highway 99 and north of the South 312th Street corridor. While these neighborhoods are
not located immediately within the City Center, they are located conveniently within
walking, bicycling, or vehicular distance. They differ greatly in character and type.
In 1997, two senior housing projects were constructed in the City Center Frame area.
These projects are located south of South 312th Street and east of 23ra Avenue South,
adjacent to the southern portion of Steel Lake Park. The two projects, Meridian/
Willamette Court and Woodmark at Steel Lake, consist of 300 and 85 living units
respectively. The residents of these developments have easy access to several shopping
opportunities and services in the City Center area. It is important to note that no new
residential construction has occurred in the City Center since that time.
Infrastructure
Most of the existing facilities and infrastructure wer6 inherited from King County. In
1998, the City adopted new streetscape guidelines related to roadway profiles,
streetlights, sidewalk widths, and street trees. In 1999, South 312~h Street between Pacific
Highway South and 23~d Avenue South was widened to five lanes, and new sidewalks,
Revised 2002 VII-7
FWCP - Chapter Seven, City Center
street lighting, and street trees were added, as well as traffic signals at 20th Avenue South
and 23rd Avenue South. In 2001, South 320m Street was improved with streetscape
elements between 11th Place South and 30th Avenue South. In 2002, the remainder of
South 320th Street also was improved and 23rd Avenue South was widened to five lanes
with sidewalks and streetscape elements. New traffic signals at South 316th, South 317th,
and South 322na Streets were installed. In 2003, construction will begin on widening
Pacific Highway South to add high-occupancy vehicle'(HOV) lanes, sidewalks, and --
streetscape elements.
7.2
VISION STATEMENT
By the end of the comprehensive planning horizon, the Federal Way City Center will
have evolved into the cultural, social, and economic center of the City and fulfilled its
role as one of Puget Sound's regional network of urban centers. This role will be
reinforced by pedestrian-oriented streetscapes; an efficient multi-modal transportation
system; livable and affordable housing; increased retail, service, and office development
in a compact area; a network of public spaces and parks; superior urban design; and a
safe, essential, and vibrant street life.
The City Center is responsive to the needs of the City's residents. In addition to general
services that draw people from outside the region, such as retail, office, and hotel uses,
the City Center is the primary commercial area providing local goods and services to the
surrounding neighborhoods, and to residents and employees within the center area.
Private development and City initiated actions will have resulted in a balanced
transportation network that accommodates automobiles, public transportation, high
occupancy vehicles, pedestrians, bicyclists, and integrated parking. Pedestrian and
bicycle circulation is emphasized along with other travel modes. The downtown urban
fabric includes smaller blocks, lending itself to efficient and pleasant travel. Concentrated
development allows a significant number of jobs and residences to be located within
close proximity to transit and a High Capacity Transit Station (HCT), thus, reducing
dependency on the automobile and improving pedestrian mobility. The regional HCT
system may begin with regional express bus service that would evolve to fixed guide-way
systems, such as light rail or monorail, as ridership dictates and funding allows. Direct
access to a regional transit system links the City Center to Seattle, Everett, Tacoma,
Bellevue, SeaTac International Airport, and other regional and local destinations.
The diversity of housing opportunities now includes high-rise residential buildings,
which help to meet a significant portion of the community's housing needs. City Center
residents walk or take transit to shop, work, and recreate. Community facilities and
services, public spaces, parks, and trails complement the variety of housing and provide
places for residents to come together as a community.
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FWCP - Chapter Seven, City Center
A central gathering place for the community, the City Center is where the whole
community can congregate and celebrate. Civic and cultural facilities, in addition to a
park and open-space system, meet the needs of residents, employees, and visitors. These
amenities connect to the Citywide and regional system of open spaces, parks, and trails.
Public and private projects contain such design elem_en_ts as fountains, sculptures, and
unique landscaping.
The quality of urban design for all developments, including streets, buildings, and
landscaping, is high and contributes to an improved quality of life. Public buildings and
spaces also set a high standard for design and compatibility with adjoining uses.
Goals for the City Center Chapter
The goals and policies of the City Center chapter are derived from those of the Federal
If'ay Comprehensive Plan (FWCP). The FWCP addresses in greater detail the framework
of regional plans and legislation which direct planning in Federal Way. It also discusses
the basic policies addressing housing, parks, recreation, and commercial development..
This chapter builds on these policies, and provides specific recommendations and actions
necessary to facilitate the development of the City Center.
The following goals provide overall direction to policy makers and community members
when making choices about growth and development within Federal Way's City Center.
Additional goals and policies are located throughout this chapter, providing .specific
direction on other matters discussed. No set of goals or policies can address all potential
issues that may arise in the course of implementing the FWCP. Therefore, while these are
fundamental to the FWCP, they are not immutable and may need to be revised as
situations warrant.
Goals
CCG1
CCG2
Create an identifiable City Center that serves as the sOcial, cultural, and
economic focus of the City. Define a City Center with distinct boundaries,
unique building types, and special features.
Attract a regional market for high quality office and retail uses which increases
employment opportunities, adds to the City's tax base, and establishes Federal
Way's City Center as an economic leader in the South King County region.
CCG3
Connect the City Center to a convenient regional transit system. Provide
service between centers and nearby areas by an efficient, transit-oriented, and
multi-modal transportation system.
CCG4
Foster distinct districts within the City Center, defining the roles and
characteristics of each such district.
/
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FWCP- Chapter Seven, City Center
CCG5
CCG6
CCG7
CCG8
CCG9
CCG10
CCGll
CCG12
Encourage a mix of compatible uses to maintain a lively, attractive, and safe
place to live, work, and visit.
Focus on improving the existing character and image of the City Center.
Encourage housing opportunities in mixed -r~sidential/commercial settings. -~
Promote housing opportunities close to employment.
Develop land use patterns that will encourage less dependency on the single
occupant automobile.
Create an environment oriented to pedestrians and bicyclists.
Create an environment that attracts high quality housing, commercial, and
office uses. Continue to enforce requirements for quality design in buildings,
streetscape, and site planning.
Create policies and regulations to encourage more efficient use of parking
facilities and to foster new, innovative, and creative parking solutions.
Protect and enhance natural features °f the area.
7.3 THE LAND USE AND TRANSPORTATION CONCEPT FOR THE'
CITY CENTER
The Concept Plan
The concept is to redevelop the City Center and create a compact urban community and
vibrant center of activity. The crux'of the strategy is to promote a compact urban center
with connections between where we live, work, and recreate, and create an urban
environment that is amenable to walking, bicycling, and transit. The concept, a result of
the citizen participation process called CityShape (held in 1992-93), implements the
community's goals outlined in Section 7.2. In summary, the concept is to:
· Establish a City Center to support HCT by locating residents and workers within
convenient walking distance of HCT.
· Make efficient use of existing capital improyements by concentrating higher
intensity land uses in the City Center.
· Encourage a mix of compatible uses where housing coexists adjacent to, above,
or near commercial developments. /
Revised 2002 VII-10
FWCP - Chapter Seven, City Center
· Create a dense residential community within walking and bicycling distance of
the core.
Improve auto circulation in the City Center by completing the proposed street
grid, creating smaller blocks, and providing opportunities for through traffic tg.
travel around rather than through the core, thus minimizing the impact of future
growth on Citywide traffic pattems and congestion.
Reduce impact of parking by encouraging structured parking, allowing reduced
parking ratios, shared parking, and other innovative and creative parking
solutions, as well as implementing guidelines that enhance appearance.
Create pedestrian and bicycle connections throughout the City Center and to
surrounding neighborhoods. Provide a safe and inviting environment for
pedestrians and bicyclists with direct connections between activities and transit
facilities. Continue to develop and/or reconstruct streets to include sidewalks,
street trees, benches, garbage receptacles, screening of parking areas, etc.
· Create high amenity pedestrian-friendly corridors through the core, linked to a
transit center and providing an attractive civic focus to SeaTac Mall.
· Provide a civic focus to create a sense of identity for all residents. Develop
municipal and cultural facilities within the City Center core area.
Develop public ?paces in the City Center, particularly the core area. Enhance the
City Center with a network of public spaces and parks connected to the Citywide
and regional system of open spaces, parks, and trails. Encourage gathering spaces
in private development.
Map VII-3 applies the principles described above. The figure depicts the City Center core
area between SR-99 and 1-5 and South 316th/317th and South 320th and 324th Streets. The
City Center core area contains a concentration of higher-density, commercial, residential,
and mixed-use development, as well as civic, social and cultural uses. The City Center
frame area surrounds the core along the west and north edges and provides a full
complement of commercial, residential, and mixed-use development at somewhat lower
densities to support the core. It aisc provides a transition to surrounding single-family
neighborhoods.
High capacity transit runs through the middle of the City Center, and pedestrian pathways
connect the HCT station with residential areas, future civic spaces, and the SeaTac Mall.
Land Use Designations
This section expands on the land use concepts described previously. The City Center
chapter contains two different land use desigffations, each with its own distinctive
Revised 2002 VII-11
FWCP- Chapter Seven, City Center
characteristics, intended to guide the evolution of the City Center, see Map VII-4. The
City Center core and frame area designations give form to the concepts summarized in
section 7.3. These land use designations direct the location and extent.of growth, and will
reshape the nature of development, transforming the area into a compact, vibrant City
Center,
City Center Core Area
For thc last 20 years or so, lower-density shopping mall areas at the edge of the nation's
larger cities have gradually been redeveloped and transformed into more dense urban
centers, emulating the development patterns and sense of place of more traditional
downtowns. This transformation, to an area with a unique character and improved image,
is proposed for the core area.
The 'intent of the core area land use designation is to create a higher-density mixed-use
"center" for Federal Way, and become an urban center as envisioned in VISION 2020
and the CWPP. The CityShape vision called for concentrating growth in an area .where
sufficient infrastructure capacity exists, or where such capacity can be provided
efficiently. The infrastructure within the City Center, specifically the core area, is
designed to handle the highest levels of demand within Federal Way. By orienting new
growth around this investment, the existing capacity can be utilized to its fullest extent.
The core area designation also encourages the concentration of new development to help
reduce development pressure in other areas of Federal Way.
The core area land use designation encourages a greater diversity of uses within mixed-
use types of development. Traditional city centers are places where diverse office, retail,
and government uses are concentrated, as well as cultural and civic facilities, community
services, and housing. Many cities are advocating mixed-use development for a number
of reasons. These include:
Providing new housing, increasing the range of housing choices, and cutting
down on automobile dependency by bringing work places and residences into
close proximity;
a Providing retail and service needs in close proximity to residential and
employment areas; and,
· Improving feasibility of a development project. The proximity of urban services
makes housing projects more desirable and a nearby source of consumers help
make a commercial project more profitable.
Residents choose to live in higher-density housing for a variety of reasons. First, higher-
density is frequently less expensive than single-family housing. Second, the convenience
and proximity to work, needed services, and cultural activities is very desirable for many
people. Finally, many people find that they do not need a large, single-family detached
house. Given their lifestyle, they appreciate the low maintenance and security of higher-
density living. There is a mutually supportive relationship between higher-density
residential uses and commercial activities. Tl)e presence of housing also activates City
Center streets, day and night.
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2 '
FWCP- Chapter Seven, City Center
Concentrating growth in a specific area also supports investment in transit, including a
regional HCT system, Existing low-density development does not generate sufficient
levels of demand to optimize the return on investment in transit. Promoting higher-
density uses within walking distance of transit facilities will improve the viability of this
significant infrastructure investment. _
Additionally, concentrating the highest density of development in the core, where a
significant number of jobs and residences will be within walking distance of a transit
station, helps reduce dependency on the automobile and improve pedestrian mobility.
The core area emphasizes pedestrian, bicycle, and transit mobility. The core area will be
less auto-oriented than the frame area, but it will not be unfriendly to the use of
automobiles.
The City Center core area will also be the central gathering place for the community--a
place where the whole community can congregate and celebrate. Accordingly, the core
should include an outdoor square, park, or commons, with public amenities such as
fountains, sculptures, and unique landscaping.
Other civic amenities or buildings, including Municipal Facilities and/or a performing
arts center, could be grouped around this City Center square (Figure VII-2).
Figure VII-2
Potential Core Area Development
Revised 2002 VII-13
FWCP - Chapter Seven, City Center
Goals & Policies That Promote the Concentration of New Development in the City
Center Core Area
Goal
CCG13
Focus new growth~ with resultant increasing demands for infrastructure an_d_
transportation~ in the City Center, specifically the core area. Allow for higher
intensity uses for efficient use of land.
Policies
CCP1
Support ~the concentration of uses within the core area to create a financial,
retail, business, civic, and cultural hub of Federal Way.
CCP2 Develop an attractive City Center that will attract quality development.
CCP3
Continue to support land use regulations that allow the higher intensity
development expected over the next 15 to 30 years.
CCP4
Continue to develop a City Center that is the primary commercial area
providing local goods and services to the surrounding neighborhoods and
region, and to residents and employees within the center.
CCP5
Complete an area-wide environmental impact statement and SEPA Planned
Action and provide streamlined permit review in the City Center to accelerate
changes to the core area.
CCP6
Work with urban service providers to ensure sufficient capacity is available for
development.
CCP7
Allow for a variety of uses and mixed-use development within buildings, or
complexes. Ensure that mixed-use development complements and enhances the
character of the surrounding residential and commercial areas.
CCP8 Provide incentives to encourage residential development in City Center, core area.
CCP9
Promote the siting of cultural and civic uses within the City Center core. The
City should always consider City Center Core sites in siting analyses and
decisions regarding potential civic and cultural uses that it develops. In
addition, incentives should be explored that could attract cultural and civic
uses over which the City does not have direct Control.
City Center Frame Area
Establishing a City Center frame area provides a zone for dense mixed-use development
that surrounds and supports the core. It also provides a transition between high-activity
areas in the core area and less dense neighborhoods outside of the frame.
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Revised 2002 V11-14
FVVCP.- Chapter Seven, City Center
The frame area allows uses that are similar to those in the core area, but are of lower-
density and intensity. Together, the core and frame areas are complementary.
Encouraging multiple unit housing mixed with business and commercial use will help
Federal Way meet regional land use goals. This is accomplished by encouraging the
development of housing close to employment and tra_n~portation centers. To help
transform the character of this land use designation, regulatory and/or financial incentives
should be explored in exchange for amenities that contribute to a more pedestrian
oriented environment (Figure VII-3).
Figure VII-3
Potential Frame Area Development
Goals & Policies That Promote New Commercial, Residential, and Mixed-Use
Development in the CitY Center Frame Area
Goal
CCG14 Allow increased development of commercial uses while increasing housing
opportunities and diversity of housing types.
Policies
CCPIO
Continue to develop land use regulations that encourage the frame area to
accommodate higher-density residential uses accompanied by residentially
oriented retail and service uses.
Revised 2002 VIM
5
FWCP - Chapter Seven, City Center
CCPll
CCP12
Continue to provide amenities such as community services, parks, and public
spaces to meet residential needs.
Continue to ensure effective transitions between frame area development and
nearby lower-intensity development.
Circulation
Federal Way's City Center chapter is designed in accordance with VISION 2020 and
CWPP related to mobility. Although regional travel trends continue to show more cars on
the road, more trips per person, and increases in the number of people driving alone, the
emphasis of the FWCP is to promote a variety of travel options. The City will focus both
on transportation improvements as well as influencing individual travel choices by
increasing the attractiveness of alternatives to the automobile. Encouraging growth in a
compact, well defined City Center will help promote bicycling, walking, and transit use:
as well as encouraging shorter automobile trips. The City Center will be connected to
other regional urban centers and areas of the City by a multimodal transportation system,
including a fast and convenient regional transit system.
In order to function efficiently, mobility in the City Center must be enhanced by
Continuing to make transportation improvements. The City should focus transportation
investments in the City Center to support transit and pedestrian-oriented land use
patterns. These improvements should include: a smaller street grid, bicycle routes, public
sidewalks and pedestrian pathways, and clear and identifiable transit routes.
These transportation improvements will also help meet City Center mobility needs in the
event a HCT system is not developed.
Goal to Improve Overall Circulation
Goal
CCG15
Provide a balanced transportation network that accommodates public
transportation, high occupancy vehicles, pedestrians, bicyclists, automobiles,
and integrated parking.
Automobile Circulation
The current network of collector roads and arterials, the disjointed grid, and large block
sizes contribute to significant traffic congestion within the City Center. The solution is
not necessarily to construct wider roads. Streets become less efficient as the numbers of
lanes increases. Building new streets versus widening existing streets is more cost
effective, yields greater capacity, and will have less impact on the City Center.
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Revised 2002 VI1-16
FWCP- Chapter Seven, City Center
Automobiles are likely to continue as a dominant mode of transportation. A comprehensive
network of collector arterials and other streets must be developed to distribute this traffic
and create more driving choices. To the extent possible, the City should connect streets to
form a tighter grid within the City Center, especiallY_in- the core, by negotiating new public
rights-of-way and building new streets. This "interconnectivity" serves to shorten and--
disperse trips, and consequently reduce travel on existing congested arterials. Map VII-5
indicates the proposed street network changes. Additionally, alternatives to auto travel such
as van and car pools, transit, pedestrian corridors, and bicycle paths should also be
emphasized.
Goals and Policies to Improve Automobile Circulation and Reduce Usage
Goal
CCGI6 Improve the flow of vehicular traffic through the City Center and minimize
increases in congestion.
Policies
CCP14
Improve t~affic flow around and through the City Center by extending the
street network, creating smaller blocks, and completing the ring road along the
west edge of the City Center.
CCP15
Reduce congestion by supporting the Commute Trip Reduction Act. Develop
commuting alternatives to single occupancy vehicles, including transit,
walking, and bicycling.
CCP16
The City's LOS standard shall be based on average person-delay to allow
lower LOS for single-occupant vehicles and support pedestrian-friendly
designs and HOV treatment.
Pedestrian/Bicycle Connections
Pedestrian and bicycle mobility is a vital part of the future City Center circulation system.
Improvements for pedestrians and bicyclists should support increases in transit services
and promote the development of the City Center.
This chapter addresses the lack of pedestrian amenities and pathways by recommending
changes to the development patterns and transforming the character of the streetscape. As
the street system is redeveloped to better accommodate the needs of pedestrians and
bicyclists, a network of facilities for people on foot and bikes will be established such as
already exists for people in cars.
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Revised 2002
VI1-17
FWCP - Chapter Seven, City Center
Reducing the size of the street grid as proposed, improving auto circulation, and creating
pedestrian paths through larger parcels is critical to establishing walking patterns that
reduce dependency on the automobile. As individual sites are designed and developed to
be more pedestrian friendly, and as the City provides improved pedestrian linkages, the
pedestrian system will handle an increasing share of flips. As such, the City adopted
special street design standards for the City Center in 1998. These include 12-foot
sidewalks with street trees and pedestrian-scale street lighting. As streets are constructed,
additional amenities such as benches, trash receptacles, and landscaped comer treatments
may be added. Bike lanes will also be provided in a grid tighter than the rest of the City
on through streets that avoid multiple mm-lane conflicts.
In addition to adding public sidewalks and creating mid-block pathways, Map VII-6
depicts three principal pedestrian connections to improve pedestrian circulation. The first
is developing connections between the HCT station, adjoining bus transfer facilities, and
other uses. The pedestrian and bicycle system is essential to other travel modes,
particularly transit. Virtually all transit trips begin and end as pedestrian trips on public
rights-of-way. All buildings within proximity to these areas should be required to
facilitate pedestrian and bicycle movement.
The second goal is to establish pedestrian and bicycle connections to SeaTac Mall, the
City's largest generator of vehicular and pedestrian traffic. Linkages between the
proposed transit station and the SeaTac Mall are important. Unfortunately, South 320th
Street is wide, congested, and presents a significant barrier to this connection. Providing
an at-grade pedestrian and bicycle crossing could increase congestion and vehicular and
pedestrian/bicycle conflicts. To facilitate this connection, and encourage redevelopment
of existing parking areas, this chapter proposes the continued consideration of a
pedestrian bridge spanning South 320th Street. The pedestrian over-pass would create a
major connection between two areas in the City Center that have a high potential for new
development and redevelopment.
The third goal is to connect the City Center to nearby neighborhoods and parks.
Residential neighborhoods of varying densities surround the City Center. Steel Lake and
Celebration Parks are located to the northeast and southwest of the City Center,
respectively. Both pedestrian and bicycle trails should extend to these residential
neighborhoods and parks. Roads extending to these areas should emphasize the
pedestrian connection by including additional pedestrian amenities.
In order to provide good pedestrian connectivity across multi-lane arterials such as South
320th Street and Pacific Highway South, crossings should be Provided more closely than
the existing ~A-mile spacing of traffic signals. Unsignalized pedestrian crossings would
not be very safe, yet closer spacing of traffic signals make two-way signal coordination
impossible to achieve, creating much more congestion and worsening safety and air
quality. These conflicting needs must be resolved through the design process as these
streets are reconstructed.
Revised 2002 VII- 18
FWCP - Chapter Seven, City Center
Policies to Improve Pedestrian Connections
Goal
CCG17
Promote and facilitate the effective use of non-motorized transportation.
Create a safe, efficient, and enjoyable pedestrian and bicycle system.
Policies
CCP17
Emphasize pedestrian and bicycle circulation, as well as other travel modes in
all aspects of developing the City Center transportation system. Include public
sidewalks, street trees, and other pedestrian amenities for streets.
CCP18
CCP19
Continue to enforce and refine local zoning codes, site planning requirements,
and street design standards, as necessary, to establish a more pedestrian and
bicycle friendly environment.
Encourage new development to include active ground floor uses such as shops,
community services, office, and housing units. Provide pedestrian connections
between adjacent buildings where possible to provide for streetscape continuity.
CCP20 Develop clear and safe pedestrian paths through large parcels to enhance the
pedestrian network.
CCP21
CCP22
Continue to site and screen parking lots to .minimize impact on the pedestrian
environment.
Connect the main entry of buildings to public sidewalks by a clear, identifiable
walkway.
CCP23
Encourage transit use by improving pedestrian and bicycle linkages to the
existing and future transit system, and by improving the security and utility of
park-and-ride lots and bus stops.
CCP24 Establish clear and well marked pedestrian crossings to reach transit facilities
and other uses at a maximum spacing of 660 feet.
CCP25
Connect Celebration Park and Steel Lake Park via a pedestrian/bicycle
pathway bisecting the City Center. Orient buildings, urban open spaces, plazas,
etc., to pathways where feasible.
CCP26
Continue to improve the appearance of, and pedestrian/bicycle circulation
along, South 320th Street and Pacific Highway South.
Revised 2002 VI1-19
FWCP - Chapter Seven, City Center
Transit
Efficient, convenient, and reliable transit is important to the FWCC's emphasis to reduce
auto dependency through the creation of viable travel options. Transit will play an
important role in the development of the City Center_and the region as a whole. A multi-
modal system that includes transit will bring commuters and shoppers to and from other
areas of Federal Way and adjacent communities. A high capacity transit system with a
principal stop in the core area will distribute people regionally and connect to other bus
based transit systems. Transit stops throughout the center will help shoppers, employees,
and residents to circulate around the City Center without the need to get into their.cars.
Encouraging a mix of land uses and densities at major transit access points will help meet
passenger needs and reduce vehicle trips.
High
Capacity Transit
Sound Transit is working with Puget Sound citizens and City representatives to develop a
HCT network linking Everett, Tacoma, Seattle, Bellevue, and communities between them.
Four HCT stations are proposed in Federal Way, including one in the City Center core area.
Map VII-7 depicts the approximate HCT alignment and location of the City Center
station. The Federal Way Transit Center is currently located at the Federal Way Park &
Ride. At the time of the adoption of the 1995 FWCP, the City Center chapter proposed a
new location at South 312th Street and 20th Avenue South. The primary driver for this
location was the assumption that light-rail between Seattle and Tacoma would follow SR-
99. Since adoption of the plan, conditions have changed and discussion of alternate
locations has emerged. Sound Transit's Sound Move Initiative allocated $4 Million for
the construction of a new Transit Center, in coordination with the enhancement and/or
relocation of the existing Transit Center and direct access ramps.
The Transit Center is considered by the City as a major anchor to the urban center
designation in the Vision 2020 plan adopted by the PSRC. The location of the Transit
Center should be surrounded by property that has potential to redevelop into transit-
supportive uses, thus assisting to ensure both the success of the Transit Center itself and
the economic vitality of the City Center.
Based on these considerations, the Transit Center site has been selected. The site is
located on the block bounded by 23ra and 21st Avenues South, to the south of South 316th
Street.
The FWCP does not depend on the development ofa HCT system. The proposed system
is one of several transportation options. While HCT will help regional and local
transportation needs, other modes will continue to play a vital role. Many of the
characteristics that are desired within the City Center, and support HCT, also support
other modes such as van/car pooling, busing, bicycling, and walking.
/
Revised 2002
Vii-20
FWCP- Chapter Seven, City Center
To encourage transit use, the high capacity transit station should provide an inviting
environment with comfortable pedestrian facilities, including shelter for waiting areas,
convenient passenger drop-off zones, safe lighting, and street furniture. Conveniences
like telephones, automatic teller machines, secure bicycle storage areas, and outdoor
seating areas are also important elements of the station design. Provisions for vendors,_
small cafes, and carts will make outdoor spaces livelier. Stores adjoining the station can
take advantage of the concentrations of people by specializing in goods and services
needed by commuters such as dry cleaning, videos, news kiosks, and day care.
Federal Way's City Center station will be oriented principally to pedestrians and those
arriving by other forms of transit. Providing for pedestrian/bicycle accessibility between
surrounding properties, street network, general vicinity, park & ride lots, and the HCT is
essential.
Policies to Guide Transit Planning and Establish a City Center High Capacity
Transit station
Goal
CCG18
Work with the transit providers to develop a detailed transit plan for the City
Center. Identify facilities, services, and implementation measures needed to
make transit a viable and attractive travel mode. Tailor the plan to meet local
needs through rapid transit, express buses, community service, and/or demand-
responsive service.
Policies
CCP27 Focus transportation investments to support transit and pedestrian/bicycle-
oriented land use patterns, specifically in the core area.
CCP28 Participate actively in regional efforts to develop an HCT system to serve the
City Center.
CCP29 Establish the most intensive levels of transit service to the City Center area.
CCP30 Integrate any transit system with existing or new road right-of-way.
CCP31
Develop a bus transfer facility as part ofa HCT station, on' or offthe street, that
will connect the City Center with other communities in the City. The HCT and
bus transfer stations will set a high standard for design and compatibility with
adjoining uses.
CCP32
Integrate the high capacity transit system with other transportation modes
serving Federal Way and the region.
/
Revised 2002
VII-21
FWCP - Chapter Seven, City Center
CCP33
Integrate bicycle and pedestrian facilities with and connect to high capacity
transit facilities during right-of-way acquisition, facility design, and optional
phases.
Civic Buildings and Open Spaces
Public buildings including community centers, libraries, city hall, performing arts
theaters, conference centers, and schools provide places for the community to meet,
exchange ideas, and socialize. The City should take advantage of every opportunity to
locate a variety of civic buildings in and around the City Center. This will occur over
time, but it is necessary to establish a clear direction through public policy.
A network of outdoor spaces for recreation, strolling, gathering, and dining will make the
City Center a lively and attractive place to live, shop, and conduct business. Each type of
space should serve a range of users and activities. Outdoor Spaces should range from a
major urban park that is the focal point for downtown, to pocket urban plazas for lunch
time gathering'by residents, visitors, and workers. Some spaces will be publicly built and
maintained, others will be constructed along with private development. Privately
developed gathering space is a major component of all City Centers: small parks and
plazas are opportunities to enhance the urbanscape and image of the City Center.
Courtyards, mews, and forecourts are ways to efficiently integrate open space'to enhance a
project. Visitors, shoppers, and employees often perceive these private spaces as public.
The City should commit to assist in or provide incentives for, the development of plazas
and parks that are open to the public. Map VII-8 proposes a central outdoor gathering
place within the core area, such as a park, plaza, or square, which will become the focus
of community activities in the core.
Uses around the edges of this plaza, such as transit facilities and cafes, should be sited to
generate activity throughout the day. The edges of the plaza should be well defined and
landscaped to soften the hard surfaces of adjacent buildings and streets. This space should
be physically and visually linked to the central pedestrian spine and transit center.
Policies to Promote the Development of Civic Buildings and Urban Spaces
Goal
CCG19
Develop civic and cultural facilities in addition to a public space and park
system within the City Center to meet the needs of residents, employees, and
visitors. These facilities and spaces shouM connect to the Citywide and
regional system of public spaces, parks, and trails.
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Revised 2002 VII-22
FWCP - Chapter Seven, City Center
Policies
CCP34
CCP35
CCP37
Promote a diversity of public and privately funded recreational and cultural
facilities throughout the City Center. Promote partnerships between the City and
other agencies, private organizations, and individuals to develop and meet the
needs of City Center and the general community for these types of facilities.
Emphasize locating civic and cultural facilities within the core. Planned public
facilities could include Municipal Facilities, a library, or performing arts
complex.
Acquire land necessary to provide a broad range of recreational opportunities
throughout the City Center. Land bank parcels in the core area for future
municipal facilities.
Parking
The continued use of expansive surface parking conflicts with the goal of redeveloping
the City Center as a higher-density, mixed-use area that is pedestrian-friendly and
supports the use of public transportation. It is, therefore, necessary to reduce the need for
parking and encourage the provision of structured parking within these areas.
Moreover, parking lots have high redevelopment potential. There are numerous examples
of communities similar to Federal Way where former parking lots now contain multi-
story develOpments. Large amounts of parking will be needed for many years to come.
However, as development pressures and land values increase, surface parking becomes
expensive and property owners will be able to afford the conversion from surface parking
to structured parking. In the interim, the City should encourage site layouts that facilitate
future redevelopment of parking areas.
Private and public partnerships should examine the feasibility of constructing a parking
structure in the downtown commercial core area. Figure VII-4 (page 24) is a conceptual
illustration of the redevelopment of surface parking around a mall.
Goal and Policies to Develop Alternatives to Existing Parking Development
Goal
CCG20
Encourage the development of a higher-density, mixed-use City Center that in
turn will reduce the demand for large amounts of separate parking facilities for
individual developments.
Revised 2002 VII-23
FWCP - Chapter Seven, City Center
Figure VII-4
Potential Redevelopment of Surface Parking Areas
Ot~r time, parking garages, Iomer par~cing requirements and shared parldng can
aittno for more int ensit~e development of land.
Policies
CCP39
CCP40
CCP41
Encourage public and private parking structures (below or above ground) in lieu
of surface parking in the core area. As redevelopment occurs and surface parking
becomes increasingly constrained, consider a public/private partnership to
develop structured parking in the downtown commercial core area.
The City will encourage the provision of structured parking.
Buffer parking areas to increase compatibility between surrounding uses. For
larger lots, provide substantial landscaping, special lighting, and pedestrian
walkways.
/
Revised 2002 VII-24
FWCP - Chapter Seven, City Center
CCP42
CCP43
CCP44
Site and orient buildings and parking to allow redevelopment of surface parking.
Allow on-street parking to create a buffer between pedestrians and traffic
depending on street characteristics and role within the City Center. On-street
parking should be viewed as a component of the parking supply for the area.
Encourage shared parking between uses to maximize the use of available
parking within the City Center.
Slreetscape
To improve livability within the City Center area, the City must complete the street
network and continue to develop streets in accord with its new street standards. The street
grid must be well interconnected to make travel from once place to another as efficient as
possible. The key to achieving this is to consider streets as a network that will serve
pedestrians, bicycles, and transit, in addition to automobiles. In areas where increased
density is proposed, existing streets must continue to be retrofitted with sidewalks, street
trees, street furniture, and other amenities. Allowing on-street parking also creates a
buffer between pedestrians and vehicles. It also allows shoppers and visitors to park
easily for short amounts of time. On-street parking should be permitted on City Center
streets (where feasible) except during the morning and evening commuting hours when
the extra lanes are needed to accommodate the extra high volumes of traffic.
The Transportation chapter illustrates several street standards developed specifically for
the City Center area. These streets will connect to other proposed and existing streets to
complete a street grid. Street standards for existing and proposed streets within the City
Center can be found in the second section of the Transportation chapter. These standards
also incorporate the City Center Street Design Guidelines adopted by the City Council in
May 1998.
Policies to Improve the Street Network and Streetscape Character
Goal
CCG21 Maintain street designations that reinforce the unique characteristics of the
City Center.
Policies
CCP45 Continue to acquire right-of-way, primarily through dedication from
development, to complete and enhance the street network.
CCp46
Continue to design streets as public spaces, with appropriate pedestrian
amenities, trees, sidewalks, bicycle paths, transit services, street furniture, and
trash receptacles.
/
Revised 2002 V11-25
FWCP- Chapter Seven, City Center
CCP47
CCP48
CCP49
Continue to construct streetscape improvements as an integral component of
any roadway improvement.
Encourage buildings to front or face public rights-of-way, providing clear paths
from the sidewalk to all entries.
Only SR-99 and SOuth 320th Street shall b~-wider than five lanes.
7.4 IMPLEMENTATION
Developing a City Center will require collfiboration between government entities,
citizens, and developers. Phasing and development of certain elements, such as high
capacity transit, are outside the City's control. There.fore, an implementation program
must be flexible. It must also be tied to general goals, policies, and strategies rather than a
detailed, step-by-step list of actions. The implementation section consists of:
· A set of strategies to guide imPlementing actions;
· An illustration of how these strategies can be realized over time; and
· A 15 year action plan.
Implementation Strategies
Specific strategies must be pursued in order to coordinate various elements and actions that
are dependent upon one another. For example, private development depends upon
adequate infrastructure and amenities. Effective transit service depends upon supporting
land use development to provide sufficient ridership. Residential communities require
adequate transportation and services, a pedestrian friendly environment; open spaces, and
jobs to foster a sense of community. In addition, much of the City Center's redevelopment
is dependent upon market demands and development that is not projected until the later
years of the FWCP's planning horizon. However, regulatory and infrastructure actions
must be taken in the interim to prepare for these developments. The following strategies
form the basis to achieve desired City Center development.
· Maintain regulations to shape and influence new development (1-20 years).
· Discourage low intensity auto oriented development in the core. Provide
regulations and incentives to achieve a high intensity, mixed-use,
pedestrian friendly development.
· Encourage residential development in the'City Center frame area.
· Encourage high-density residential development in the City Center Core
(Urban Center).
Allow short-term investment in the frame area that will support long~
/
term core development.
Revised 2002 VII-26
FWCP - Chapter Seven, City Center
Develop specific plans to construct needed street and infrastructure
improvements (1-5 years).
· Develop plans to define the location of street rights-of-way for
completing the street grid and constructing transit facilities to provide
predictability for developers: _ _
· Construct arterial improvements with associated landscaping and
pedestrian amenities (timing set by capital facilities program).
· Prepare a pedestrian and bicycle plan and construct sidewalks, pedestrian
paths, mid-block connectors, and bicycle connections to all areas o£the
City Center and particularly to a transit center (ongoing effort).
Consider development of structured parking facilities as needed to support more
intensive development and gradually convert the core into less auto dependent area.
· Develop parking standards for the City Center Area.
Improve both local and regional transit service.
· Begin new transit service configuration by adding a center bus stop and
route buses to it (begin immediately).
· Upgrade central bus stop to a transit Center/station and enhance regional
and local transit services to it (1-3 years).
· Develop a regional HCT station at transit center (10-15 years).
Construct civic features, public spaces, parks, and other urban elements to create
a true urban center and promote civic identity (5-10 years).
· Develop major civic facilities in the City Center such as, Municipal
Facilities, performing arts center, and recreation center, to generate social
and economic activity (5-10 years).
· Add amenities to residential areas to build new neighborhoods (begin
immediately as an incremental program).
· Include landscaping and pedestrian improvements in all street
construction (incremental program tied to actual improvements).
Phasing
Transforming the existing downtown commercial core area into the proposed City Center
is an ambitious task. It requires a significant transformation from a low-density,
automobile oriented, largely retail area to a higher intensity, more pedestrian oriented
mixed-use area: The City Center chapter acknowledges that the core will take some time
to develop. The City can facilitate these changes ifa series of small steps are taken over
time. This is especially true if the steps are consistent with the emerging economic,
social, and demographic trends. As is the intent of this plan, the phasing scenario
presented here accounts for the timing of read'et projections and future actions.
Revised 2002 VII-27
FWCP - Chapter Seven, City Center
As noted above, the implementation strategy is keyed to projected trends and regional
planning goals. Its form and character, as envisioned in the chapter, are dramatically
different from anything that now exists in the center. It will take some time for the
development community to redirect its energy and investments to produce buildings that
respond to the direction of the chapter. The demand i~6r more intense development --
opportunities in the City Center is not projected within the next few years. In the
meantime, there may be some deferred maintenance, short-term, high-turnover tenancies,
and even vacancies, as the development community begins to assemble property for
future redevelopment. The City should not encourage continued low-scale investment in
this area, since it will need to be amortized over a decade or two and will delay
accomplishment of preferred development. As regulations are applied to modest
renovations, it should be possible to secure some basic improvements. However, the City
should not expect full implementation of the vision for the City Center until owners are
ready to install long-term, major development projects.
Figures VII-5 and VII-6 and Map VII-9 (located at the end of the chapter) illustrate key
steps in the evolution of Federal Way's City Center from 1995 through 2025. The
illustrations are taken from a viewpoint just north of South 316th Street between 20th
Avenue South and SR-99. The drawings do not necessarily indicate recommendations for
specific sites. The locations of the elements and the time frames may well vary. For
example, Figure VII-6 shows an elevated light-rail line that may not be routed to Federal
Way during this planning horizon. The drawings do illustrate how a viable City Center
can evolve through several coordinated, incremental steps taken over time. The
approximate dates are based on current market demand and funding projections.
However, new trends, funding priorities, and development opportunities may emerge,
changing the timing. An illustration of 1995 conditions is included for reference.
2002 - 2010 Actions
Develop a pedestrian/bicycle plan that outlines a connected, safety-oriented
system of routes and facilities. This chapter shall be used in programming capital
projects, reviewing development proposals, and encouraging other agencies to
integrate bicycle improvements and linkages into Federal Way projects. The plan
should emphasize linkages between transportation facilities, Celebration and
Steel Lake parks, SeaTac Mall, and surrounding communities.
· Continue to plan for and develop parks and public spaces within the City Center.
Begin negotiations for acquisition of land for a City Center park, plaza, or square.
· Complete streetscape improvements along the South 320th Street corridor.
· Continue to improve SR-99 and establish mid-block crossings.
· Complete the BPA bike trail.
Revised 2002 V11-28
FWCP- Chapter Seven, City Center
l
Continue to negotiate and acquire rights-of-way to augment the City Center street
grid. During permit review, ensure that new development is compatible with the
street grid. Construct street grid enhancements.
· Develop a transit center. Focus transit activities in the City Center core.
· Construct streets to serve the transit facility.
· Begin negotiations to form a public private partnership to provide structured
parking near SeaTac Mall. Construct the parking structure.
If the City .Council Chooses the City Center as the appropriate location for
Municipal Facilities, begin negotiations and acquire property for Municipal
Facilities. Construct Municipal Facilities.
Explore feasibility of creation of a City Center park, potentially associated with
Municipal Facilities and/or other community facilities. If the concept is
approved, begin negotiations and acquire property for a City Center Park. Design
and construct a City C6nter Park.
Enhance educational and recreational opportunities in City Center.
2010 - 2020 Actions
· Construct a City Center park with public amenities such as fountains, sculptures,
and unique landscaping, separate from Celebration Park.
· Potentially construct public-private parking garages.
· Potentially construct the pedestrian overpass across 320th Street, and build phase
one of the City Center pedestrian mall.
· Improve community-wide transit service and implement a "spokes-of-a-wheel"
service delivery pattern with City Center as the hub.
· Seriously explore the feasibility of constructing a performing arts center and
develop an implementation plan.
· Establish green parks and corridors throughout the City Center and/or along.a
City Center pedestrian mall.
Activity Since 1995 Comprehensive Plan Adoption
The following have been accomplished to implement goals and policies of the City
Center chapter since the initial adoption of the, FWCP:
/
Revised 2002 VII-29
FWCP- Chapter Seven, City Center
In 1996, the City adopted code amendments for the City Center Core and Frame
to allow for increased residential density and flexibility in siting residential uses.
The City also adopted Community Design Guidelines intended to improve the
appearancd of non-residential buildings and to expand pedestrian circulation,
public open space, and pedestrian amenities.
In 1998, in conjunction with King County/METRO, the City improved local and
intercity transit which should result in more people having access to shopping
and other opportunities in the City Center. Since that time, the City has worked
with the transit providers to develop a detailed transit plan for the City Center,
including siting and initial design work for the City Center Sound Transit station,
as well as improvement of two park-and-ride lots.
In 1998, the City adopted policies to provide streetscape enhancements and
development of standards for streetlights, street trees, and their placement and
location in the City Center. Since that time, substantial progress has been made,
with full improvement along this corridor from I-5 to 11th Avenue South.
The City has an adopted TIP and CIP plan which addresses major street
improvements in the City Center. Minor collector and local street improvements
would be provided by development as redevelopment occurs.
In 2001, the City created an Economic Development Division within the
Community Development Services Department and hired a Deputy Director to
manage it. Among the Division's duties are to lead efforts to encourage City
Center redevelopment, attract businesses and developments, and increase
visitorship to the City Center.
Phases I, II, and III of the BPA trail have been constructed.
Infrastructure improvements:
· 1999 - South 312th Street between Pacific Highway South .and 23ra
Avenue South--Roadway widened to four lanes; sidewalks constructed;
street lighting and street trees installed.
· 1999 - South 312th Street and 14th Avenue South--Pedestrian Crossing
Signal added.
· 2001 - Pacific Highway South/South 320th Street intersection--Widen
roadway and add new turning lanes at each leg of the intersection. Also
add street lighting, street trees, install architectural and landscaping
elements at each comer of the intersection, and underground utilities.
· 2001 - SeaTac Mall surface water conveyance system upgrade.
· 2001'02 - South 320th Street between 11~t~ Avenue South and Interstate 5
--Underground utilities, widen sidewalks where necessary to add new
streetlights, install street trees behind the sidewalks, and install medians
where, feasible. Add dual left-turg/anes at 23ra Avenue South.
Revised 2002 VII-30
FVVCP- Chapter Seven, City Center
· 2002 - 23rd Avenue South between South 324th Street and South 316th
Street--Widen roadway to five lanes and add new sidewalks, street
lighting, and street trees. Install new traffic signals at South 316th Street,
South 317th Street, and South 322nd Street.
· 2002~ompleted the Ring Road (14th Avenue).
· 2002 - South 312th and 14th Avenue South,--Upgrade pedestrian signal to
full traffic signal.
New Private Development:
· 2000 - Courtyard Marriot Hotel
· 1999 - Marie Calendar's Restaurant
· 1999 -. Holiday Inn Hotel
· 1999 - Extended Stay Motel
· 1998-Comfort Inn
· 1999-Walmart
· 2001-02 - Pavilion Centers, Phases I and II
Renovated or Remodeled Projects:
· 1998- SeaTac Village
· 1998- Sunset Square (Safeway and Longs Drugs)
· 1999 - Ross Plaza (Rite Aid and Party City)
· 1999 - Indochine and Genghis Khan Restaurants
PROPOSED PROJECTS
2002-03 - Pacific Highway South between South 312th Street and South 324th
Street--Widen roadway, add new sidewalks, street lighting, street trees,
landscaped raised medians, and underground utilities.
· 2003 - South 314th Street and 23rd Avenue South---Construct traffic signal.
2003 - I-5/City Center Access Study--Develop plan to increase capacity
between City Center and I-5 to improve and/or supplement the existing South
320th Street interchange.
· 2003-04 - Potentially locate new municipal facilities.
· 2003-05 - Sports and Multipurpose Fieldhouse--potential project.
· 2004 - Flyover ramps from I-5 High Occupancy Vehicle (HOV) Janes
connecting to South 317th Street.
· 2004 - South 317th Street and 23rd Avenue South--Construct Sound Transit's
Federal Way Transit Center.
· 2004 - Add turn lanes on South 324th/Street at SR-99. ~'
Revised 2002 VII-31
Figure VII-5
Illustration of City Center, 1995 Conditions
·-:--- S. 320th street : . 20th Avenue S. Pacific Highway S.: .... ;
........ Executel ........ S. 316thStreet
Figure VII-6
Illustration of City Center Evolution, 2025
For Illustrative Purposes Only
; ..... Oi~ Half and Plaza
...... Hotel
...... Structured parking
:
:
.'
-'-' -. Pedestrian Spine .
:
Courtyard Residences .....
,-
.-
.-
..
Performing Arts Center and Park
.-
:~ ..... HCT Station and Bus Mall
Map VII-1
Vicinity Map
Map VII-2
Boundaries of City Center Area
Map VII-3
The Concept Plan
New Transit Center
Potential Pedestrian
Crossings
Potential Bike Route
Transit Street
Enhanced Street Network
City Center Corn
City Center Frame
Park
Map Dal~: Febf'L~, 2003.
0 5~)D 1,01)D Feet'
~ ~'hernl wdy
Map VII-4
City ~nter Land Use Designations
Map VII-5
Enhanced Street Network
,,, .....
~..~ ...... :~:.~::,. ~. ~'~':'...~ ?~ ~..~ ~.. ~. ~, ,. ,, ,.,?"
~ . .~ ~ .. ~', ,,~,,,.,' . .... ~ · ~ ..... , ,~,
,, ,,,' '. -,~ :. ~1:~ ~ ........ ?,,,,','.,:,¥.: ~ , Mill
~ ~;.' ,, ??,,: ,,,
~ ~ m~uu.~.~ I ~ ~ ~ I ~ VIII
~ , ~ ~xxx~:',~ .... ' --'- . ~ ~'-..~ '~ I//~ L
~j PropoB~ ~reet ~ Park
ImmvemenC
Map VII-6
Principal Pedestrian and Bicycle Connections
Map VII-7
Potential Transit Alignments and Stops
Map VII-8
Potential Open Space and Bicycle Routes
~1~'.::'/2,~,~ ~ LL"=~a
.... .. . ~ .~ ............ ....... ?
~~~.~,~. ,~,.::: :~,~ j - ~ ~ ~
,~..~ ~ ,.~;~,~. ,~ ..~..,~. I ~
~ ~ ~:~' '. .' ~th~t
~,,. ~ . ~ ~,, ~:, ..
~ kistbg Bicycle Route ~ Park ~ Map Oa~: Febt~. 2003.
~' Planned Bi,cie Route N
~ Target ama for Ci~c Center ~ , I ,
~ ICi~CenterCore
~ Ci~ Center Frame ~ ~eral ~
Map VII-9
Phasing Concept 1995-2005
CHAPTER FOUR- ECONOMIC DEVELOPMENT
4.0 INTRODUCTION
The Growth Management Act (GMA) includes economic development as one of its basic
goals and it is a theme that runs throughout the GMA. It considers the need to stimulate
economic development throughout the state, but requires that these activities be balanced
with the need to protect the physical environment. It encourages the efficient use of land,
the availability of urban services, and the financing strategies necessary to pay for
infrastructure. Finally, the GMA mandates that communities do theirplanning and then
provide the zoning and regulatory environment so that appropriate development can
occur. It recognizes that while the public sector can shape and influence development, it
is the private sector that generates community growth.
The Puget Sound Regional Council (PSRC) has also adopted region-wide goals and
objectives to guide multi-jurisdictional transportation and land use policies that will be
implemented through local comprehensive plans. Economic development is implicit in
many of the goals and objectives of VISION 2020. The VISION 2020 strategy
emphasizes that continued economic stability and diversity is dependent upon public and
private sector collaboration to identify needs, such as infrastructure and land, and to
invest in services that will promote economic activity. VISION 2020 also emphasizes
that the stability of the regional economy increases when it develops and diversifies
through the retention and strengthening of existing businesses and the creation of new
business.
King County, through its growth management planning policies and process, re-
emphasizes the economic development implications of growth management. The
Countywide Planning Policies (CWPPs) promote the creation of a healthy and diverse
economic climate. The CWPPs describe the need to strengthen, expand, and diversify the
economy. They encourage protection of our natural resources and enhancement of our
human resources through education and job training. The CWPPs also speak to the need
to make an adequate supply of land available for economic development by providing
necessary infrastructure and a reasonable permitting process.
Within this policy framework, Federal Way has outlined a vision of its economic
development future. Its vision is to transform itself from largely a bedroom-community
of Seattle into a diversified, full-service, and self-contained city (Map IV-I, located at the
end of the chapter). However, in doing so, it is important to remember that Federal Way
is part of the larger Puget Sound economy, and therefore, this transformation will depend
in large part on the market forces at work within the greater region. To achieve this
vision, the City must diversify its employment base by adding more professional and
managerial jobs, and by increasing the overall number of jobs in order to improve the
balance between jobs and households in the (2{ty. The potential is there. Federal Way's
unique location between the two regional centers of Seattle and Tacoma, both with large
concentrations of population and large, successful ports, and its relationship within the
FWCP- Chapter Four, Economic Development
Central Puget Sound region represent significant opportunities. The City is also home to
Weyerhaeuser's Corporate Headquarters, located within East Campus, and the West
Campus Office Park, two of the premier office park areas in the region. In addition, the
City holds unique regional attractions for entertainment and recreation, such as
Celebration Park, King County Aquatic Center, and Six Flags Enchanted Parks/Wild
Waves.
The City's economic development vision is based on the following: 1) economic and
demographic analysis; 2) market analysis of long-term real estate development in Federal
Way; 3) synthesis of real estate and development trends in the Central Puget Sound area;
and 4) review and comment from the planning Commission.
4.1 SUMMARY OF EXISTING CONDITIONS AND TRENDS
Overview
Since the last update to this chapter of the Federal }Vay Comprehensive Plan (FWCP),
there have been significant changes in the local, regional, national, and international
economic conditions.
Previously riding a sustained, strong economic wave associated with extraordinary
growth in the high-tech industries, strong growth in the airline industry, and generally
positive national and international perceptions of the Pacific Northwest, the Seattle-
Tacoma metropolitan region, and the State of Washington, Washington began to show
early signs of an economic downturn by mid-2001. Riots in nearby Seattle, first
associated with the meeting of the World Trade Organization in November 1999, and
later with the 2001 Mardi Gras festivities, had begun a series of negative publicity images
of Seattle and the Seattle area. This negative publicity was exacerbated by the February
28, 2001, Nisqually Earthquake, and later in 2001 by the Boeing Company's
announcement that it was moving its corporate headquarters to Chicago. In addition, by
mid-200 I, the national economy had begun 'to slow down, the "dot-com" industry had
suffered a generalized melt-down, and the Pacific Rim countries, upon which so much of
this state's trade depends, continued to slide further into their own recessions.
The effects of the September 11, 2001, terrorist attacks on this country jolted the
economies .of most of the world's countries and regions, but had a particularly hard
impact on the Puget Sound region. As air-travel-related commerce plummeted
worldwide, the Boeing Company, its affiliates, and related industries, saw sharp drops in
orders, and Boeing announced its intentions to lay off tens of thousands of workers over
the ensuing two years.
By the beginning of 2002, lay-offs around the Puget Sound region became a
commonplace occurrence, stemming from cutbacks at Boeing, other companies related to
the airline and travel industries, and numerou~ "dot-com" and high-tech companies.
However, according to the 2002 King County Annual Growth Report, the King Cotinty
Revised 2002 IV-2
FWCP- Chapter Four, Economic Development
economy remains strong despite severe shocks. Unemployment has risen to 6.2 percent as
of June 2002, but that level is no worse than the historical average. Aerospace
employment in the Puget Sound region now stands at 72,000, with about 47,000 of that in
King County. Although well below its record employment levels, the aerospace sector
continues to provide high wages to local workers. High tech continues to expand despite
the shakeout of a few companies. Other services, whpl_esale, and retail lost employment
before the recession hit aerospace, so they may be ready to grow again in the coming
year.
The significant overall income growth in software and other sectors propelled King
County into eighth place among all 3,100 counties in the United States in total payroll
paid during 1998. Measured at $41 billion by the Census Bureau, King County's total
business payroll exceeded that of 26 states, including Oregon, which has twice as many
people as King County. Among other issues raised by such large numbers is that of the
disparity of wealth and income between King County and the other parts of Washington
State outside the Puget Sound region. In 1998, more than 52 percent of wages paid in the
state were in King County, in contrast to our 29 percent share of the state's population.
Some of that difference reflects high tech jobs in Seattle and the Eastside, as well as high
wage manufacturing jobs in South King County.
Long-range prospects are mixed. Boeing forecasts production of around 250 airplanes
this year and next. Sale of those planes will bring in billions of dollars, much of which
will be reinvested in the Puget Sound economy. But with the move of Boeing
headquarters to Chicago, long-term prospects for aerospace are less certain, although the
company has continued to emphasize its investment in the Puget Sound region. Sales tax
and other government revenues are declining at a time when public investment is needed.
The area is doing remarkably well so far, but if these underlying issues are not addressed,
there could be lasting consequences to King County and the Puget Sound region.
Due to the markedly weaker economic conditions now in the Puget Sound region than
during most of the past decade, economic development efforts in Federal Way will have
to become more creative, innoVative, and broader in scope. The traditional focus on
retaining and attracting businesses will not be enough. New efforts, reaching into other
economic sectors and using new and innovative strategies, will be necessary.
General Patterns of Existing Development
Previous development trends indicate that the non-residential areas of Federal Way
reflect a community that has the ability to absorb higher density (mor.e compact) uses and
greater development as growth in the Central Puget Sound region continues. And even
though Federal Way is a new city in a suburban area, much of its future will be tied to
redevelopment and transformation. Federal Way is characterized by:
" High-quality single- and multiple-family residential areas
· A range of housing that includes very modest tract homes, manufactured
dwellings, and large luxury waterfront homes
Revised 2002 IV-3
FWCP- Chapter Four, Economic Development
· Auto-oriented, suburban scale regional and community shopping centers and
strip centers
· Corporate headquarters
· Two high-quality business and office parks--West Campus and East Campus
· Little developed space for quality business, flex-tech, and office parks
· Semi-rural areas, wildlife areas, truck stops, areas without utilities, and much
vacant open space
· Recreation/amusement parks
· A waterfront primarily occupied by high-quality homes, but not particularly
accessible to the public
· Many marginal commercial areas with redevelopment potential along Pacific
Highway South (SR-99) that are vestiges of a prior era
Demographics
Federal Way historically has been primarily a suburban, bedroom community. It has
more households than jobs and as a result, provides more workers to the region than it
attracts. However, since the City's incorporation, this balance between homes and jobs
has shifted. Based on US Census data, the City's residential population grew by 23
percent from 67,554 in 1990 to 83,259 in 2000, while the City's covered employment has
grown by 44 percent from 21,756 in 1990 (as reported by the 2001 King County Annual
Growth Report) to 31,315 in 2000 (PSRC's 2000 Covered Employment Estimates).
These figures indicate that during the past decade the City has begun to shed its
"bedroom community" status, with more opportunities for residents to stay within
Federal Way for their employment, as well as becoming more of an employment
destination for residents from beyond Federal Way.
The 2000 Census information shows that Federal Way's median income levels have
grown substantially since 1990, with the City leading the South King County cities in the
percentage of wage-earning households, as well as median household income. The 1990
Census reported median household income at $38,311. The figure grew by 29 percent
over the decade leading to the 2000 census, with a median household income reported of
$49,278, which is higher than the median household'incomes of any of the other major
South King County cities (Renton, Kent, Burien, Auburn, Tukwila, and SeaTac), as well
as Seattle.
Revised 2002 IV4
FWCP- Chapter Four, Economic Development
Moreover, it is interesting to note that the median household income of wage-earning
households (which comprise 87.3 percent of all Federal Way households) was reported at
$57,748. This median household income figure is also higher than that of any of the other
major South King County cities, as well as higher than the South King County's average
of $55,637. Similarly, Federal Way's Percentage of wa_ge-earning households (87.3
percent) is higher than any of the other major South King County cities (which range --
from 79.9 to 86.8 percent). As a result, and given the City's large population, Federal
Way has the highest annual gross income of any of the South King County .cities.
However, Federal Way and the South King County cities continue to lag behind the East
King County cities in terms of median household income, which range from $60,332 in
Kirkland to $66,735 in Redmond.
Federal Way's Regional Role
Federal Way is optimally located at a mid-point in the Seattle-Tacoma metropolitan
region at the intersection of I-5 and SR-18, with easy access to the Port of Tacoma, Port
of Seattle, and SeaTac International Airport. Federal Way's location is a prime asset as
traffic congestion and concerns over personal and freight mobility within the region
become paramount issues for commerce and industry, as well as commuters.
Nevertheless, the economic boom of the past decade has largely been concentrated in the
Eastside communities, Downtown Seattle and South Snohomish County. However, with
changes in the high-tech industi-y, increasing traffic congestion, soaring housing prices,
and increasing limits to growth in those areas, the "Southend bias" may become a thing
of the past, leaving Federal Way in an even better position from a regional perspective.
Economic Base
Federal Way's retail base is diverse and attracts customers from outside the City limits.
Its market share, however, is relatively Iow compared to other Southwest King County
communities. Although Federal Way retailers capture a good deal of the City's primary
and secondary market expenditures for general merchandise and food trade, a high
percentage of the local populace goes elsewhere to shop for automobiles, apparel/
accessories, miscella~neous retail purchase, building material, and furniture. Overall, the
capture rate for retail sales as a function of the City's primary and secondary trade area
total retail expenditures is relatively low, about 51 percent (Federal Way City Center
Market Analysis, prepared by ECO Northwest, July 2002).
PSRC's 2000 Covered Employment Estimates reported that in 2000, covered employment
(those jobs covered by the state's unemployment insurance program) within Federal Way
and throughout King County could be broken down as shown in Table IV-1 (page 6).
As can be seen from this data, in 2000, Federal Way';s strongest employment sectors were
Finance, Insurance, and Real Estate, and Retail, which exceed the countywide averages
considerably. The City had noticeably fewer jobs than average in the Manufacturing and
Wholesale, Transportation, Communications, and Utilities sectors. Based on recent
events in the employment sector, these numbers may be lower today.
Revised 2002 IV-5
FWCP- Chapter Four, Economic Development
Table IV-1
2000 Covered Employment Estimates
Federal Way and King County
Federal Way Employees Countywide Employees
Employment Category (Percentage) (Percentage)
Construction and Resources 1,029 -'- (3.3%) 69,949 (6:1%)
Finance, Insurance, and Real Estate 13,947 (44.5%) 440,364 (38.3%)
Manufacturing 3,103 (9.9%) 147,933 (12.9%)
Retail 8,158 (26.1%) 189,457 (16.5%)
Wholesale, Transportation,
Communications, and Utilities 1,606 (5.1%) 158,307 (13.8%)
Education 2,042 (6.5%) 64,454 (5.6%)
Government 1,431 (4.6%) 80,542 (7%)
Total 31,315 1,151,006
Market Share
Industrial and business park space available to rent in Federal Way is a minuscule share
of the Southend/Green River/Seattle market area. The South King County industrial area
(including industrial parks, business parks, and flex-tech hybrid business/office parks) is
currently the strongest real estate market in Western Washington.
The industrial areas of south Seattle, Green River Valley, and Fife/Tacoma constitute one
of the strongest markets for industrial, warehouse, wholesale, distributing, etc.,
businesses in the Western United States. The City of Federal Way is in a strategic
position to capitalize on these markets by providing prime office space and room for new
office development, as well as quality housing.
Retail and Lodging Development
Developed and opened in 1975, the SeaTac Mall was the primary force behind the
growth of retail in Federal Way during the 1980s. After a period of some decline in
recent years, SeaTac Mall is currently a prime candidate for updating, redevelopment
and/or repositioning to acquire a stronger market position. In 1995, Pavilons Centre
replaced the old 'Federal Way Shopping Center, and in 2001 the Pavilions Center Phase II
came on line, with more development at that location yet to come. In 1998, SeaTac
Village was given a complete face-lift incorporating the City's commercial design
guidelines. In addition, in the late 1990s, a new Walmart store moved into the City Center
Frame, and there have been several renovations and remodeling of existing retail
structures, including the conversion of the old Safeway building at the southwest comer
of South 320th and Pacific Highway into Rite Aid and the old K-Mart into Safeway.
Within the last two years, a 45,000 square foot Best Buy has opened in the City Center
Frame and a 52,000 square foot Albertson's r~emodel has occurred in the Community
Bu. siness zone along Pacific Highway South.
Revised 2002 IV-6
FWCP - Chapter Four, Economic Development
Between 1995-2000, four hotels/motels have been constrdcted in and around the City
Center. These include Holiday Inn, Courtyard Marriott, Extended Stay, and Comfort Inn.
In addition, a Holiday Inn Express and Sunnyside Motel (Travel Lodge) have been built
south of the City Center along Pacific Highway. Ha _wt_horne Suites, a 65 unit Country__
Inn, has been recently constructed along Pacific Highway South in the Community
Business zone south of the City Center.
Office Development
Federal Way's East and West Campus Developments set a standard in the region as two
of the best examples of master-planned office campuses in the Pacific Northwest. The
quality of development in this area is decidedly different than elsewhere in Federal Way
and Southwest King County.
Within the last two years, the majority of new office development has been located
within Federal Way's East Campus which has seen the following development: Foss
Office Building at 108,000 square feet; Capital One Office Building at 143,000 square
feet; and Federal Way Office Building and Warehouse at 70,767 square feet.
The West Campus area has seen little new office development. Although permits have
been issued for additional office development in the West Campus, rising vacancy rates
there have stalled additionhl development for the near term.
In the City Center no new additional office development has occurred since the last
comprehensive plan update, and office buildings continue to constitute a minority of the
City Center's development.
Other commercial areas within the City have seen limited amounts of office development,
such as the recent Lloyd Enterprises building at 34667 Pacific Highway South.
Business Park (Light Industrial) Development
There has been no substantive Business Park development since.the City's incorporation.
This lack of recent Business Park development suggests the influence of market forces
outside of the City limits, where cheaper land and established industrial parks act as a
draw for prospective business park development.
Residential Development
One of Federal Way's strengths is the range and quality of its housing stock. The quality,
quantity, and range of options for housing are/major factors in business siting decisions.
According to the 1990 US Census data, the median value of owner-occupied homes in
Federal Way was $118,800. In contrast, the average sales price of Federal Way owner-
Revised 2002 IV-7
FWCP - Chapter Four, Economic Development
occupied homes in 2001, as reported by the King County Office of Regional Policy and
Planning, was $194,092, with single-family homes averaging $213,060 and condominiums
averaging $112,135. These figures contrast with other King County cities, as outlined in
Table IV-2.
Table IV-2 - -
2001 Average Sales Prices of Owner-Occupied Homes in King County
Place All Homes Single-Family Condos
Federal Way $194,092 $213,060 $112,135
Auburn $197,965 $2' 16,549 $124,089
Renton $215,341 $248,271 $149,608
Kent $198,844 $222,580 $142,577
Des Moines $206,379 $207,302 $202,142
Seattle $318,671 $342,922 $240,6 ! 9
King County $295,158 $321,700 $198,822
As one can see from the above data, homes in Federal Way are generally more affordable
than in the immediately surrounding communities and are far more affordable than homes
in Seattle and the Eastside communities.
While single-family houses remain Federal Way's dominant housing type, the majority of
housing starts since the late 1980s were multiple-family. Multiple-family units as a
percentage of all housing units increased from less than 10 percent in 1970 to nearly 40
percent in 1990. During the late 1980s, there were twice as many multiple-family housing
units constructed in Federal. Way than single-family housing units. From 1990 to 1992,
permitting of multiple-family construction stopped, and single-family construction
slowed to about one-third of late 1980 levels.
It is interesting to note than in 1990 median monthly rental rate for Federal Way was
$476, while the median monthly rental rate for King County communities varied between
$398 and $458. That is, Federal Way's multifamily housing stock was on the higher end
of cost within the region. Since then, Seattle and some Eastside locations have become
particularly expensive, and Federal Way's multifamily housing stock is substantially
more affordable than those locations, while averaging competitively with nearby
communities, as seen in Table IV-3 (page 9).
Since 1996, the vast majority of multi-family housing development has taken place in the
senior/assisted living market. During that time approximately 792 senior or assisted
housing units have been added in the City, in addition to 240 skilled-care beds. This is
compared with approximately 135 non-senior multifamily housing units. The lack of
multi-family construction beyond this sub-market speaks to the recent market forces that
appear to have discouraged investment in market rate multi-family development that
commands lower rents than the King County average, as seen above. In order for the City
to successfully encourage multi-family housigg at a rate commensurate with the long
range housing targets est.ablished under the GMA, City policy must address the market
factors unique to this type of development activity.
Revised 2002 IV-8
FWCP- Chapter Four, Economic Development
Table II~-3
Average Multi-Family Rents, Spring 2002
Two Bedroom/
Place All Units
One Bath
Federal Way $710 ~. _ $749
Auburn $684 $716
Renton $811 $869
Kent $712 $747
Des Moines $701 $686
North Seattle $852 $787
Queen Anne $ !, 104 $923
Bellevue-West $1,129 $1,200
King County $839 $869
Institutional, Educational, Cultural, and Recreational Development
Federal Way enjoys a variety of affordable, high-quality health care. The City boasts
three outstanding health care facilities, St. Francis Hospital, Virginia Mason Clinic, and
Group Health. These facilities continue to grow and expand in the services they offer the
region. In the last two years, Virginia Mason has developed a 30,000 square foot building
addition, and St. Francis Hospital is currently constructing a 62,000 square foot addition.
Built in 1998, the Knutzen Family provides a venue for professional theatre and the
symphony. The Federal Way Parks, Recreation, and Cultural Services Department offers a
Summer concert series at Steel Lake Park, which is also home to the annual Family Fest
celebration. Each year, Federal Way's July 4th Red, White, andBlues festival is held at
Celebration Park, where the nationally acclaimed tournament soccer and baseball facilities
draw additional tourist activities.
Federal Way offers ~,number of collegiate and vocational opportunities. Highline
Community College operates a local branch campus in Federal Way. The Eton Vocation
College, located in the heart of Federal Way, is a vocational college focused on job
training for today's competitive market.
In 2001, the DeVry Institute of Technology opened their first Northwest Campus in
Federal Way. This 100,000 square foot facility provides technology training customized
to increase'employee workplace skills.
Summary
in summary, Federal Way's role in both the Central Puget Sound area and Southwest
King County has been defined by its inventor)/of prime office space in campus-like
settings, wide variety of retail and services, and large stock of quality housing. These
basic sectors are enhanced by Federal Way's regional role as a center for amateur
Revised 2002 IV-9
FWCP- Chapter Four, Economic Development
athletics. Much of the highway oriented commercial space that was developed in the
1970s and 80s in response to rapid Population groWth has been starting to undergo
redevelopment, and this trend will continue. The West Campus and East Campus areas
serve as models for the quality of modem commercial, office, and business Park space
Federal Way will need in order to attract its share of future regional growth. Urban design
and infrastructure in other areas of Federal Way must be brought up to these standards. In
addition, the existence of large parcels of land ownerShip in the 344th/356th area and --
312th/324t~ area of the core corridor will give Federal Way a development advantage.
Federal Way will continue to foster the development of institutional and cultural
amenities designed to enhance the City's regional image as a desirable community
offering a high quality environment for living and working.
Federal Way's Competitive Position in Southwest King County
Subregion
While many of the development patterns are set in the Southwest King County subregion,
Federal Way and five other cities have seen, or will see, significant change. These
additional five cities are Auburn, Kent, Renton, SeaTac, and Tukwila.
Table IV-4 (page 11) encapsulates each of these cities' current market niches, as well as
their opportunities and challenges, in order to help understand how Federal Way relates
to its neighbors. As can be seen in the table, much of the area surrounding Federal Way is
dedicated to industrial, light manufacturing, low-scale office parks, wholesale/warehouse,
distribution, etc., especially in Auburn and Kent. Much of this is not in direct competition
with Federal Way. Tukwila is the major retail center for South King County and provides
the region's stiffest competition for regional retailers and retail establishments, such as
department and furniture stores, specialty apparel, etc. While the trade area for Tukwila's
retail sector is large, Federal Way lies at the most distant point in South King County
from the Tukwila/Southcenter retail center, and its trade area overlaps or competes the
least with Tukwila. The City of SeaTac provides little competition in the office,
industrial, and retail sectors, but has successfully captured the airport-related lodging
industry, with several higher-quality establishments, including conference facilities.
Renton has historically had a strong economic base tied to the Boeing Company, with
both healthy manufacturing and office sectors; however, both of these sectors have seen a
substantial weakening with the Boeing Company headquarters relocation, work force lay-
offs, and space consolidation. Auburn and Kent have also experienced a substantial
increase in vacant light-industrial building space due to Boeing Company reductions.
Notwithstanding relative levels of competition from other communities in specific
commercial sectors, Federal Way does experience a "competitive" relationship with
several nearby municipal governments that must be taken into account. The City of
Renton is a recognized leader in the county with respect to economic development, with a
particular focus on downtown redevelopment and economic diversification. That city has
invested public funds in land assembly projects that have attracted substantial residential,
mixed-use, and auto dealership developments., Following Renton's lead are the
communities of Ke. nt and Tukwila, which have also targeted key redevelopment
opportunities, acquiring/assembling land and attracting desired mixed-use development.
Revised 2002 IV-10
FWCP- Chapter Four, Economic Development
Similarly, Renton and Kent provide tax incentives for certain residential development and
provide other financial incentives to desired redevelopment projects. In addition,
Tukwila, Renton, and Kent have made substantial personnel and facilities investments in
improving customer service and turn-around times associated with development permits.
In addition to these five cities in Southwest King Co~un_ty, Tacoma is an important
competitor to Federal Way. Tacoma is an older city that has made many efforts to
improve its downtown and image for more than a quarter century. Tacoma city
government has an aggressive economic development mission and is recognized
regionally and nationally as a leader in the field. It has continually devoted its own funds,
as well as state and federal grants, to stimulate economic development. Tacoma has a
strategic location on the highway system and a strong port with much unrealized
potential. In addition, both the city and suburbs have vacant and redevelopable land, as
well as relatively cheap accessible land for residential development.
Table IV-4
Summary of Economic Conditions in Southwest King County Cities
Auburn Federal Way Kent Renton SeaTac
Tukwila
Current -Industrial areas -Regional mall -Industrial land -Business parks -Airport related
-Regional retail
Niche -Vacant land -West Campns -Boeing -Mid-rise office -Redevelopable land
-Boeing
-Regional mall -East Campus -Business parks -Mid-rise office
-Redevelopable light
-Weyerhaeuser Hdq -Vacant land -Mid- and high-rise
industrial
-Vacant land & lodging and
-Mid-rise office
redevelopable land conference centers
-Mid-rise and high-
rise lodging and
conference centers
Opportunities -Commuter rail -Weyerhaeuser -Boeing facilities -Boeing & -Adjacent to Sea/ac
-Strong retail identify
-Established office, -West Campus -Commuter rail PACCAR's mfg. & Airport
& concentration
business parks, & -East Campus -Established office, office complex -Major HCT
-Redevelopment
industrial areas -Large concentration business parks & -Mid-rise buildings Stations planned
potential
-Cross-valley hwy of retail industrial areas -Potential -One large strategic
-Location at cross-
connector planned -Land assembled for -Cross-valley hwy redevelopment parcel assembled
roads 1405/1-5
redevelopment connector planned areas -Future hwy - cross-
-Boeing office/mfg
-Central location -Strengthening -Strengthening roads (I-5 &
complexes
between downtown downtown SR509) from
-Proximity to SeaTac
Tacoma & Seatlle .~New Permit Center -Strong economic Seattle will open
Airport & to Port of
-1-S/SR 18 and investment in development focus acres for office and
Seattle
crossroads development -City parmership business parks
-Commuter rail
-HCT stations review resources with private sector
unanticipated
-City partnership in redevelopment
-Permit process rec-
with private sector
ognized for speed
in redevelopment
of turnaround
-City partnership
with private sector
in redevelopment
Challenges -Distance from I-5 & -Dispersed -Industrial image -Limited retail -Adjacent to SeaTac
-Limited vacant land
major economic development -No prospect.for attractions Airport
for business &
concentrations pattern HCT -Limited land for -Massive
office parks
-Low-scale -Not on commuter -Off-center location business & office redevelopment
-Freeway access not
development rail on SR 167 parks required
easy or obvious
-Off-center location -Weak downtown -Small land holdings -Not anticipated to -Land assembly
-Limited vacant land
-Wetlands in CBD be on HCT line required
-No obvious center or
-Reduction in Boeing -Wetlands -Off-center cross- -Not on commuter
focal point within
presence; vacant -Reduction in Boeing roads (1-405 & SR rail
Tukwila
buildings presence; vacant 167) -Limited quality
-Limited quality
buildings -Reg~ction in Boeing -residential supply
-residential supply
presence; vacant -No obvious center
buildings or focal p6int
Revised 2002
IV-11
FWCP - Chapter Four, Economic Development
In summary, any program of economic development for Federal Way must monitor
conditions and trends in Tacoma and Southwest King County, and act decisively and
aggressively to increase the City's strategic position.
Summary of Achievements
Although the City of Federal Way's economic development efforts are relatively new,
several important accomplishments in formulating the City's economic development
strategy have already been accomplished.
The City of Federal Way/Federal Way Chamber Economic Development
Committee meets monthly to discuss and develop economic development
strategies and maintain a close and cooperative working relationship.
The City has developed Celebration Park which, in addition to the recreational
amenities for City residents, includes tournament-quality soccer and softball
facilities that attract players and tournaments from throughout the Pacific
Northwest, thereby contributing substantial economic activity to Federal Way
through expenditures for lodging, shopping, dining, and other services.
In 2001 the City officially incorporated an Economic Development Division
within the Community Development Services Department and hired a Director.
With increasing lodging tax revenues, the City of Federal Way Lodging Tax
Advisory Committee has expanded its work plan to include more direct efforts to
stimulate tourism and visitorship to the City.
The City has co-found, ed and co-manages the South King County Technology
Alliance, a working committee of various municipal entities and businesses
within South King County dedicated to fostering further development of tile
technology sector within South King County.
The City has embarked on a concerted effort, led by senior management, to
improve permit processes and reduce regulatory hurdles to development. In 2001,
the City worked collaboratively with the Federal Way Chamber and other
stakeholders to raise the thresholds that trigger right~of-way improvements
associated with redevelopment, remodeling, and reuse of existing buildings. In
2002, the City has embarked upon a permit-process improvement effort that
includes a public stakeholder advisory committee and study of best practices
from around the region, and is intended to place Federal Way at the forefront of
regional municipalities in regulating land use and construction effectively and
efficiently. /
Revised 2002 IV-12
FWCP - Chapter Four, Economic Development
4.2 THE ECONOMIC DEVELOPMENT VISION FOR FEDERAL WAY
The vision for economic development in Federal Way can be encapsulated into four basic
areas: 1) to retain existing businesses and attract new businesses in order to build a
diverse economic base; 2) to increase the number of jobs within the City relative to the
population of City residents within the labor force; 3) to foster redevelopment of the City
Center from a low-scale, suburbanized commercial area to a full-service, high-density,
mixed-use, and more pedestrian-friendly urban core and community foca! point; and 4) to
build upon and expand the City's recreational and cultural assets to increase visitors to
the City and encourage greater visitor spending within the local economy. The strategy
encourages or accelerates the trends and transformations that are already occurring in this
community. The major objectives of the strategy include the following:
· Provide a better balance between housing and jobs by increasing the number of
jobs within the City relative to the number of households.
· Diversify the economic base by encouraging higher paying white collar and
technical jobs while preserving and enhancing the strong retail base.
Generate more demand for hotel room-nights through growth in office and
business part space.
Foster horizontal mixed-use employment sector growth in the South 348th Street
area in the near term (2000-2005).
Foster continued Corporate and Office Park employment sector growth in East
and West Campus in the mid-term (2000-2010). It should be noted that East
Campus has recently been experiencing a high rate of growth and may reach
build out during this time period.
· Emphasize private redevelopment and land assembly through fhe I-5/SR-99
corridor, especially in the City Center, as well as the 348th and 336th areas.
· Redevelop and improve the quality of the mixed use development along Pacific
Highway South from South 272"a Street to South 356th Street (2000-2010).
· Foster mid-rise, mixed-use employment sector growth in the City Center (2000-
2020).
· Encourage quality development throughout the City to attract desirable economic
development in Federal Way.
· Maintain and improve the quality and character of the existing residential
neighborhoods.
Revised 2002 IV-13
FWCP- Chapter Four, Economic Development
Promote high quality, higher density residential neighborhoods in the City Center
and Highway 99 corridor in close proximity to jobs and good public transportation.
Continue to work with the lodging providers to promote year-round vistorship to
the City to encourage visitor spending as an important component of a growing
local economy.
Work with other agencies to provide services for education and training, as well
as social services and other remedial programs for the underemployed and the
unemployed.
Future Regional Role for Federal Way
Encourage greater diVersity in the economic base by aggressive pursuit of a
broader range of the components of the regional economic activity, as well as
greater participation in international/Pacific Rim economic activity.
· Increase its share of locai resident-Serving retail and services, and increase its
share of regional, national, and international oriented business firms.
· Increase its capture of region-serving office development.
· Emphasize private redevelopment and land assembly through the I-5/SR-99
corridor, especially in the City Center, as well as the 348th and 336th areas.
Strengthen the City Center as the City's focal point for commercial and
community activities. Transform the City Center into a regional commercial
destination, as well as a major transit hub.
Generate more demand for hotel room-nights through growth in business park
and office space, as well as recreational and cultural amenities that draw visitors
from throughout the Pacific Northwest and beyond.
· Take advantage of its location with respect to the Ports of Tacoma and Seattle, as
well as the SeaTac International Airport.
Public and private sectors in the Federal Way area act cooperatively and
aggressively to attract firms from throughout the region, the nation, and other
countries.
· Actively pursue relationships with areas in other parts of the Pacific Rim region
for trade, commerce, and cultural advantage.
Actively pursue cooperation and collaboration with other nearby municipalities,
organizations, and firms to market Federal Way and South King County for
technology-related enterprises.
Revised 2002 IV-14
FWCP- Chapter Four, Economic Development
Retail Areas
SeaTac Mall and other regional retailers within thc City redcvclop/rcposition to meet
changing consumer demand and become more competitive with other regional
retailers.
· High-volume retail in Federal Way increases faster than population.
· Growth in resident-serving retail occurs in the City Center, existing commercial
nodes~ and in redevelopment areas along SR-99.
Neighborhood scale retail development keeps pace with population growth and to an
increasing extent, is accommodated within mixed-use buildings in more concentrated
neighborhood villages.
· Pedestrian-oriented retail development emerges gradually in the redeveloped City
Center.
· Small amounts of retail use occur on the ground floor of offices, residential buildings,
and parking structures.
Neighborhood scale retail development in concentrated neighborhood villages
emerges in response to growth in multiple-family concentrations in the I-5/SR-99
corridor and new single-family development on the east side of I-5.
· Old, outdated strip centers along, the SR-99 corridor redevelop as a mix of retail,
office, and dense residential uses.
· The large truck-stop facility at the intersection of Enchanted Parkway and South
348th Street is redeveloped into a retail or mixed-use commercial center.
Office Development
· Offices of regional, national, and/or international firms locate in West Campus, East
Campus, and the City Center.
Garden, high-rise, and mid-rise office space, and modem light-industrial buildings
increase rapidly in areas with land assembled for business parks and in redeveloped
retail areas.
· Office development is integrated with retail, residential, and business parks.
· Federal Way attracts more corporate regional headquarters and regional offices.
/'
· Smaller, older, outdated office structures are replaced with newer uses.
Revised 2002 IV-15
FWCP - Chapter Four, Economic Development
· Integrated, campus-like high amenity areas are encouraged for corporate
headquarters and modem research/development of high technology uses east of I-5.
· Development of technical and research space increases in East and West Campus.
· Federal Way attracts more high-tech firms and fifins whose business is related to-
high-tech industries.
Business Park (Light Industrial) DevelOpment
· Business parks contain a mix of uses in and among buildings as dictated by the
market for high quality space.
The City should explore potential changes to the Business Park zoning designation to
meet changing market conditions and make the development of Business Park-zoned
land more economically viable.
Residential Areas
· High quality residential areas are important for attracting and retaining businesses.
· A range of housing types, densities, and prices allow the broad spectrum of
employees to live near their work and recreation.
· The City of Federal Way encourages integration of high density housing with retail
and other uses, especially along SR-99 and in the City Center.
Institutional, Educational, Cultural, and Recreational Development
The City of Federal Way will continue to work closely with existing institutional
entities (such as St. Francis Hospital, Federal Way School District, King County
Library, etc.) as important components of a full-service local economy.
Federal Way's reputation as an important center for amateur sports competition and
participation grows stronger, leading to potentially new facilities and venues, as well
as increased visitorship and visitor spending in the local economy.
Federal Way's cultural assets increase in both scope and number, gaining greater
patronage and attracting visitors from beyond thee City limits. New cultural
establishments are developed in Federal Way, such as museums, exhibitions, and
performance venues. Likewise, new cultural events become established in Federal
Way, such as music festivals, art shows/f~estivals, etc.
Stimulate quaiity development of region-serving institutional and technical facilities.
Revised 2002
IV-16
FWCP- Chapter Four, Economic Development
Existing recreational amusement facilities continue to develop as regional tourist
attractions.
The City of Federal Way creates working partnerships with institutions of higher
education in order to encourage and support their expansion and further integration
within the Federal Way economy, as well as to i~e. ntify and exploit increasing
opportunities for economic development.
4.3 FORECAST OF ECONOMIC GROWTH IN FEDERAL WAY
The growth forecasts used in this chapter are derived from the 2000 Market Analysis and
2002 City Center Market Analysis, prepared by ECONorthwest, while other chapters of
are based on the PSRC regional forecasting model.
In summary, probably the strongest sector in the near-term (five years) will be the retail/
services sector. About 1.5 million additional square feet of retail tenant space may be
expected during the next 20 years, with commercial areas throughout the City and the
City Center alike sharing in the development. One particular sector that appears under-
represented is the quality restaurant sector, in which the City will likely see additional
development.
Demand for new office development will likely be somewhat low in the near term, as
office vacancies have risen substantially and rents have correspondingly fallen, region-
wide. In addition, several office buildings, particularly in the West Campus area, exhibit
substantial vacancies that can readily absorb near-term demand in the City. Nevertheless,
the long-term picture looks good, with continued demand for and interest in office space
in Federal Way, particularly in the East and West Campus areas. City Center office
development will likely lag behind for most of the planning horizon. However, generous
zoning, panoramic views, and proximity to the freeways and transit may st~/rt to make the
City Center a more attractive location for mid- to high-rise office development in the 10
to 20-year time frame.
With regard to housing, only a small amount of land remains in the single-family zoning
districts to accommodate new single-family dwellings. As a consequence, the vast
majority of new residential development will have to take the form of townhouses, walk-
up apartments, mid-rise apartments, and mixed-use buildings and/or high-rise residential
buildings. As with the condition for single-family development, the majority of the multi-
family-zoned land is also already developed, leaving primarily the commercial zones and
City Center as the potential location of a great deal of the future residential development.
Nevertheless, higher land values and construction costs, and lower relative rental rates
compared with other communities in the region, act as barriers to residential development
within the City Center in the near term, unless public-sector actions create financial
incentives, reduce development costs, 'or otherwise create conditions attractive to housing
developers. Therefore, in the short term, most' multi-family housing developments will
continue to be seen in the remaining multifamily-zoned areas and in the neighbo.rhood
Revised 2002 IV-17
FWCP- Chapter Four, Economic Development
commercial areas or other commercial areas along Pacific Highway South. While multi-
family housing is generally not permitted in the Business Park zones, this zone will
continue to accommodate senior housing developments, as has been seen in recent years.
In the longer term, assuming no public-sector incentives, as rental rates rise and demand
increases, housing developers will likely respond to the opportunities for development
within the City Center, and begin to add multi-family housing there, as well.
Substantial new lodging development in Federal Way is not anticipated in the near term,
unless actions are taken to increase demand substantially. With business travel somewhat
cut back due to increasingly burdensome airline-travel procedures since September 11,
2001, the demand for hotel rooms has dropped. Business~related travel may be slow to
return to earlier levels. Sports-related lodging demand during the late Spring, Summer,
and early Fall has 'been solid over the past few years and is expected to increase, although
development of new lodging facilities will likely not follow increased demand during
only a few months of the year. If sports- or event-related facilities are developed within
the City that could accommodate off-season events, it is likely that more near-term
demand for lodging would rise and could occasion development of new facilities within
the five-year timeframe.
Like all forecasts, these should 'be periodically monitored relative to the real estate market
and economic conditions in South King County, the Central Puget Sound region, and
Federal Way. In addition, the economic development policies and underlying assumptions
related to local and regional decisions concerning infrastructure, transportation systems,
and land use regulation should be carefully monitored.
4.4 IMPLEMENTATION
Aflributes of Successful Economic Development Programs
Successful economic development programs typically have the following attributes. First,
they receive material support and leadership from the mayor, City Council, and senior City
staff. Second, the municipal leadership is willing to work creatively and cooperatively with
private sector leaders and businesses to accomplish economic development goals. They
have the ability and find the resources to target infrastructure projects and programs to
encourage development or redevelopment of specific areas. To do this, they work
aggressively to secure state and federal funds for local public and private assistance.
Likewise, City staff is empathetic toward economic development goals and
knowledgeable about working within City legal constraints, budget constraints, and
community tolerances to assist businesses and the real estate development process. The
staff also has the ability to react and make decisions quickly and consistently to provide
assistance for private sector dealings with the public planning and regulatory processes.
The staff's ability to link several programs, te. am up with other departments, and leverage
limited funds allows them to take meaningful and effective action. In addition, the City
should be creative and open to exploring' and adopting innovative regulatory and
Revised 2002 IV-18
FWCP - Chapter Four. Economic Development
incentive programs to attract and retain businesses and development projects, such as
SEPA planned actions and developer agreements. Key among such programs should be
any.feasible efforts aimed at predictable and streamlined permitting processes.
The City's Role in the Economic Life of a-.Community
In the State of Washington, the direct actions that cities can take to encourage economic
development have historically been more limited than in other states. Nevertheless, in the
past few years several new and important tools have been made available to local
communities to help encourage red. evelopment, retain/attract jobs, and foster "smart
growth." These tools include:
· Community redevelopment financing (similar to tax increment financing)
· Limited tax abatement for multifamily development
· Communityempowerment zone designation
· Community renewal act (updated and expanded version of former urban renewal)
· Tax deferrals and exemptions for high technology businesses and investment, as
well as manufacturing investment
· Industrial revenue bonds
Notwithstanding these state programs, there are still substantial constraints on the scope
of actions a city government can do with respect to economic development activities.
However, one of the most significant direct actions a city can take is to provide the
necessary infrastructure. This includes: 1) developing long term facilities expansion
plans; 2) designing the specific systems and projects; 3) raising or borrowing local funds
to finance the projects or act as a conduit for state, federal, and intergovernmental funds;
and, 4) forming public-private partnerships to jointly construct projects.
Second, a city can deliver high quality and cost effective urban services. These necessary
services include police and fire protection; parks, recreation, and cultural services; social
services and job training; and a well-mn land use planning and regulatory process. In
addition, a city can actively participate in public/private groups designed to help
businesses and the development community as they work their way through the state and
federal regulatory processes.
Third, a city can directly impact economic development by doing market research or by
being a landowner and developer. For example, a city could develop, maintain, and
disseminate data and analysis on local development conditions and trends, as well as
monitor important trends and assumptions upon which plans, programs, and strategies are
based. In addition, a city can buy land, aggregate parcels, and make necessary
improvement so that it is ready for new development or redevelopment. For some projects,
Revised 2002 IV-19
FWCP- Chapter Four, Economic Development
a city can issue industrial revenue bonds or other tax-free municipal bonds. This also
allows a city to joint venture with a private sector partners for appropriate development.
In terms of indirect roles, a city can act as a facilitator to convene public and private
entities to work on issues of local importance and reach consensus. Preparation of a
comprehensive plan is an example of this important indirect action. A city can act as a
representative of local resident's and business's intefe}ts in resolving regional and
countywide problems such as traffic congestion, housing, and human service issues. A
city can also mobilize local community support for important projects and problem
solving; and work to improve the overall image of the community and in doing so, make
the community more attractive for economic development.
Lastly, a city's public investment in municipal facilities, such as city administrative
offices, judicial/court facilities, community centers, and cultural and recreational venues
can be a factor in inducing further economic development. By targeting a subarea for an
infusion of redevelopment investment and daytime population, nearby businesses not
only may see a greater captive market, but may also be encouraged to remodel, renovate,
and/or improVe their establishments. Cultural and recreational facilities can have a wide
range of economic impact, from simply attracting residents to a particular part of the city
(e.g., city center) more frequently where they may patronize other businesses, to
attracting visitors from around the region and country who will bring new revenue to the
local economy through lodging, restaurant, and goods/services expenditures.
General Approaches to an Economic Development Strategy
There are basically four local economic development strategies that impact the level of
private business growth in a community.
First, studies of employment growth experience in local communities in the United
States show that the large majority of new jobs are generated by expansion and
retention of businesses that are already located 'in the community. A city's role in
this strategy is to help businesses resolve p.r. oblems so that they can expand locally
rather than move to another community. Problem resolution includes helping a
business find a larger more suitable site, work through a land use or zoning
regulation problem, or access necessary infrastructure. This strategy typically has
low to moderate cost implications and a high probability of success.
Second, the relocation of firms from other parts of the country or new plant
locations are rare and do not account for a significant share of local employment
growth relative to overall employment gro~vth in the United States. However,
when new firms do relocate to the community, the boost in the local economy
can be great and the "press" can attract the attention of other firms. Local
governments can attract new business to their community through aggressive
marketing strategies (websites, brochures, etc.), close collaboration with regional
economic development councils and chambers of commerce, and through
financial incentives. This strategy has. high risk for the number of successes and
has a high cost.
Revised 2002 IV-20
FWCP- Chapter Four, Economic Development
Third, new businesses that are the result of new business start-ups, spin-offs from
existing local firms, and new business ideas and technologies are another
effective way that communities increase employment and businesses within a
local area. Local government encourages new business formation usually through
indirect methods. These strategies can have _m9derate-to-high costs depending _o.n
the specific actions and low-to-moderate degree of success.
Fourth, tourism and visitorship can be very important components of a local
economy. A city with recreational or cultural assets that draw visitors can build
upon these assets to increase the numbers of visitors, the length of their stays, and
the amount of money they spend in the local economy. Local government can
work to market the community and its assets beyond the immediate region to
bring in new economic activity and can invest in recreational or cultural
infrastructure to attract more events and/or visitors.
Human Resource Programs
In addition to the economic development strategies discussed in the previous section,
human resource development programs are another general way whereby cities can
support economic development. These programs are often not included as parts of an
economic development program because they focus on assi'sting people--the human
resource for businesses. However, improving and remediating human resources is an
important long run approach. The previous four general approaches to economic
development strategies try to raise revenues, reduce costs, or reduce risks for business
location, facility investment decisions, and operating decisions of businesses.
Human resource programs make a community attractive to new and existing businesses
by improving the local labor force. Components of a human resources program may
include: 1) providing temporary support for underemployed workers, unemployed
workers, and their families; 2) providing job training and retraining to improve an
individual's ability to enter or remain in the work force; 3) creating referral and other
programs that allow labor resources to become more mobile and to respond, to
information about job openings; and, 4) by providing social service programs that meet
the needs of community residents who are temporarily not able to participate in the
economy. In many instances a City's human resources program addresses some, if not ali,
of these human resource development objectives.
Economic Development Strategy For Federal Way
As with many cities, Federal Way will have limited fUnds with which to pursue its
economic development goals. The City will have to use its resources in a focused and
· prioritized manner to have a positive impact on the local economic base. Table IV-5
(page 22) summarizes how Federal Way will?mplement an appropriate economic
development strategy.
Revised 2002 IV-21
FWCP - Chapter Four, Economic Development
Table
Economic Development Areas and Actions
Sub Area of Who Initiates What Land Uses Are How Are They
Federal Way Action Encouraged Encouraged Reasons Timing
PRIMARY ECONOMIC AREAS - -'
City Center Public w/ Mid/high-rise office. Sound Transit Station. To increase capture of Emphasis S-10
private support. High-density MF In-fill infrastructure, regional growth. (20) years.
residential. Public amenities. To provide community
Civic/cultural~ Market amenities and assets focal poinl/¢ore.
recreational= Potential tax incentives. To obtain more full-range
Pedestrian-oriented SEPA Planned Action. of goods/services in City_.
retail.
344~ to
356~/SR99
Public w/ Mix of Iow-rise office Regulations that encourage Large parcels allow this Emphasis 0-5
private support. & light industry, high-quality design, subarea to respond to the (10) years.
"Big box" retail. Aggressive infrastructure market for business &
investment, industrial park uses in
Large land assembly. Southwest King County.
Current Buildout & maintain Facilitate buildout through One of the City's prime Ongoing in
landowners, quality, predictable, efficient commercial amenities as response to
permitting process, one of the highest quality market.
Assist maintenance of master planned
infrastructure and public developments in the
areas. Pacific Northwest.
Weyerhaeuser High-quality corporate Predictable, efficient One of City's prime In response to
Corp. & office parks, permitting process, commercial amenities, market &
Assist maintenance of Large landownership with corporate
infrastructure and public vision, resources, & track actions.
areas, record can attract major
investors.
West Campus
East Campus
336~ linkage:
four primary
economic dvpt
areas.
Old Hwy 99
outside of main
economic areas.
Public w/ High density MF. Land use & capital Provide housing & su- As appropriate
private support. Low rise office, improvements for gradual pport services for for market.
Supportive retail, redevelopment/in-fill, economic areas.
Public amenities. Transportation infrastructure.
Public w/ High capacity & Land use & capital Provide a range of ho- As appropriate
private support, business related, improvements for gradual using & support services for market.
High density MF redevelopment & in-fill. & retail for economic &
residential. Aesthetic improvements residential areas.
Low rise office, through sign code and urban
Auto-oriented retail, design guidelines.
Neighborhood
commercial.
Economic Development Goals
The City of Federal Way will not wait for market forces to create the future, but will act
to shape and accelerate the evolving market trends in the direction of its vision. The City
will pursue the following goals to implement.economic development.
Revised 2002 IV-22
FWCP - Chapter Four, Economic Development
Goals
EDG1
EDG2
EDG3
EDG4
EDG5
EDG6
The City will emphasize redevelopment that transforms the City from a
suburban bedroom community to a full-service community with an urban core.
The City will encourage concentration of non-residential development into four
primary areas:
· High-density mixed-use development in the City Center (312th and 320th,
SR-99 to I-5)
· Mixed-use development in the area around 348th and SR-99
· High-quality office park development, including corporate headquarters,
continued in and around West Campus
· High-quality office development, including corporate headquarters in a
park-like campus setting east of I-5
The City will help facilitate redevelopment of existing neighborhood
commercial centers in the SR-99 corridor and the 336th area between West and
East Campus.
The City will channel further residential growth into existing multi-family and
commercial-zoned areas, with a particular goal of encouraging residential
development in the City Center.
The City will encourage and support the development of recreational and
cultural facilities and/or events that will bring additional visitors to Federal
Way, and/or increase visitor spending.
The City will encourage and support existing businesses to remain and/or expand
their facilities within Federal Way.
Economic Development Policies
EDP1 Redevelopment of the City Center will receive special attention in the FWCP.
EDP2
The City will explore the feasibility and utility of a process to master plan the
City. Center, jointly funded by public and' private entities, to encourage
appropriate redevelopment.
EDP3 The City will continue to seek high-quality urban design and infrastructure
standards for these areas.
EDP4
The City will prepare a SEPA Planned Action for the City Center so that
compliant development proposals may receive permit approvals with a
minimum of environmental review/
Revised 2002 IV-23
FWCP- Chapter Four, Economic Development
EDP5
EDP6
EDP7
EDP8
EDP9
EDP10
EDP11
EDP12
EDP13
EDP14
EDP15
EDP16
The City will complete designs for public infrastructure to be jointly funded by
the City and private landowners.
The City will work actively to formulate ways for joint public/private funding
of infrastructure.
The City will develop zoning, permitting, and potential financial incentives that
encourage prioritized development consistent with comprehensive and subarea
plans and orderly, phased growth.
In order to encourage efficient and desired development and redevelopment of
existing land designated and zoned for various types of commercial uses, when
considering proposals for comprehensive plan amendments and rezones to
commercial designations and from one commercial designation to another, the
City will consider development trends in commercially zoned areas, market
demand for various types of commercial land, and amount of vacant
commercial land.
The City will utilize innovative planning techniques such as Planned Unit
Developments~ and developer agreements to aid in efficient and predicable
permitting for large developments.
The City will explore innovative financing techniques such as Local
Improvement Districts, Industrial Revenue Bonds, and other innovative
financing tools to encourage desired redevelopment.
The City will work with the private sector to actively encourage the retention
and expansion o£existing businesses~ as well as bring in new development,
businesses, and jobs to the community.
The City will promote the community by working with the Federal Way
Chamber and the private sector to develop marketing tools that attract new
businesses, visitors, and investments.
The City will develop and manage an economic development web page that
promotes business and development within the community, provides an interactive
database of information of value to businesses and developers, and involves the
participation of the Federal Way Chamber and other stakeholder groups.
The City will fund its portion of the public/private groups to allow them to do
an effective job in marketing the community.
The City will continue to utilize design guidelines to enhance the urban
environment to retain and attract businesses and residents.
The City will adopt streamlined per¢itting processes consistent with state and
federal regulations to reduce the upfront costs of locating businesses in the City.
Revised 2002 IV-24
FWCP - Chapter Four, Economic Development
EDP17 The City will continue to pursue aggressive public safety programs designed to
protect residents, businesses, and their investments.
EDP18
The City will encourage strong public and private leadership to solicit
community support for internal and externa!._funding assistance.
EDP19 The City will periodically monitor local and regional trends to be able to adjust
plans, policies, and programs.
EDP20
The City will actively work with representative groups of business and property
owners, including the'Federal Way Chamber and other local business
associations, to enhance citywide and subarea improvements and planning.
EDP21 The City, in conjunction with the local business community, will actively pursue
ties to Pacific Rim nations and businesses to stimulate related business activity.
EDP22
The City recognizes the importance of cultural and recreational activity to its
economy and through the Arts Commission and Parks Department will pursue
joint ventures with private groups and individuals in developing cultural and
recreational opportunities.
EDP23
The City will encourage the expansion of existing and development of new
multi-purpose facilities to host cultural and recreational activities in order to
increase the number of visitors to Federal Way and resultant visitor spending.
EDP24
The City will continue to market the community for, and encourage development
of, businesses in the high-tech sector. This effort will include exploration of
regulatory and/or financial incentives to attract high-tech businesses and
collaboration with regional communities, businesses, and local institutions of
higher education to promote Federal Way and South King County.
EDP25
The City of Federal Way will strive to create working partnerships with
institutions of higher education in order to encourage and support their
expansion and further integration within the Federal Way economy, as well as
to identify and exploit increasing opportunities for economic development.
EDP26
The City will consider opportunities to partner with local human-service
organizations to assist in providing human resources development programs for
unemployed or under-employed workers.
The foregoing policies will assist the City of Federal Way to pursue an accelerated
transformation toward the community's vision of its future.
Table IV-6 (page 27) describes the four major employment, economic activity areas of
the City that will receive the bulk of future commercial and industrial development. The
table summarizes the characteristics, location/and planning process required as well as
the major transformation required. The major public and private actions required for each
area are listed.
Revised 2002 IV-25
FWCP - Chapter Four, Economic Development
The Land Use and City Center chapters of the FWCP describe these four areas in more
detail. Table IV-6 describes the current ownership pattern and major activities where the
City will act affirmatively to transform these areas so that an increased share of regional
growth will be attracted to the City. In the areas of multiple ownership, control and
implementation of the community's vision will require more explicit effort and resources
from the City' government. Both West and East Cam~fis have, or will develop, their own
high standards for quality of the new development.
The type of development expected to occur in each of the four major economic sectors
important to Federal Way's vision is related in Table IV-7 (page 28). Also related in the
table are who the main competitors will be for each of these four areas. The land use
polici"~s and regulations for each area should accommodate and encourage these
activities. These policies and regulations are discussed in the Land Use, City Center, and
Transportation chapters of the FWCP. ~
Revised 2002 IV-26
I-
Z I-
ATTACHMENT F
Summary of Leonhardt:Fiteh Survey Results
Related to the City Center
The following responses were offered by the following groups to these open-ended
questions:
What are Federal Way's biggest problems or weaknesses?
Community Representatives:
· No downtown
· "Concrete" downtown (no green space)
Business Executives:
· Downtown is horrible
· Parts of downtown are "shabby" and "very run-down"
· No core downtown
· No sense of community
· You don't get the feeling of being in a city
· Commercial district is NOT aesthetic at all
Chamber of Commerce Representatives:
· Lack of a downtown
· Lack of pedestrian-friendly walkways
· Lack of city identity
Thinkdng about the future, what are the biggest opportunities?
Community Representatives
· Creating a pedestrian-friendly downtown
Business Executives
· Developing a downtown core area. The city needs a heart.
· Rethink downtown. Attract other businesses.
· Become an enclave within the Pacific Northwest/Puget Sound.
Chamber of Commerce Representatives
· Downtown
o More pedestrian friendly
Attractive parks and small businesses
o High-quality, goodvalue retail
What do you think the City has done within the past few years to attract and support
businesses?
Business Executives
· Trying to create a downtown corridor. The downtown corridor could be great.
If we could do it and do it well, then great. But we need vision. We need
leadership. We need development. Try to upgrade its look and feel. Before
development was a hodgepodge ....
MEMORANDUM
TO:
FROM:
DATE:
RE:
Federal Way City Council
Kathy McClung, Community Development Services Director
January 8, 2004
Annexations (Copy of Draft PAA Study attached)
Key Council Questions:
Does the current annexation policy (not formally adopted) need to be revisited?
Do the council envision ultimately annexing everything in the PAA?
If so, what is the timeframe you would like to adopt?
Background:
City Actions to Date:
· Adopted Potential Annexation Area (PAA) in cooperation with adjacent cities and King
County in 1993.
· Initiated a PAA Study in order to establish zoning, assess infrastructure and prioritize areas
for annexation..
· Passed resolution to add three areas (Redondo East, North Lake and Brittany Lane) to next
Fall's ballot for annexation.
2004 Work Plan:
· Adopt PAA Study.
· Complete update to the Comprehensive Plan and incorporate zoning decisions for PAA area.
· File Notice of Intent to Boundary Review Board.
· Resolve outstanding policy issues (i.e. signs, junkyard)
Other Considerations:
· Countywide Planning Policies state that cities adopt a phasing plan for annexation of their
PAA's.
· King County is pushing almexations to occur within the next three years.
· The State Growth Management Act requires incorporation of PAA's.
· Not every area in the PAA will be revenue neutral.
Current Policy:
Until recently, the City has not considered an annexation area until citizens in that area have
requested it. This is not a formally adopted policy. How aggressively should the city pursue annexations?
Council Direction:
What is the annexation work program for the next three years? The PAA Study is scheduled to
begin hearings at the Planning Commission meeting in February. The issues should reach the Council this
Spring. 'At that time, complete, detailed information will be provided for the entire PAA area. Staffhad
anticipated that policy decisions about PAA priorities would be addressed at that time. The Council may
want to delay any decisions on the PAA until they have detailed information to study and the consultants
are available.
City of Federal Way
MEMORANDUM
Date:
To:
From:
Subject:
January 8, 2004
City Council
Mary McDougal, Human Resources Manager
City's Current Salary Structure
Key Questions:
What is the City's current salary structure/pay for performance system and how
does it work?
Does the Council want to continue the current system or consider this issue
further?
I. Pay Plan History and Policies
After establishing the new City and many of its structures the City Council
formed a citizen group to work with a consultant and staff to design a pay plan.
The process started in April 1991 and resulted in a classification and
compensation plan that was adopted by the City Council on November 19, 1991.
The pay plan set a salary range of 26.5% from the lowest to maximum salary for
each position/classification.
In addition, the Council set the top salary of the range for each position at the 60th
%ile of the market for the position, meaning that once an employee reached the
top of their range, the salary for the position would be at the point where it was
above 60% of the comparables and below the other 40%.
At the December 17, 1991 City Council meeting, the pay plan was further refined
to add a performance element. The final plan split the 26.5% range into two
halves of 13.25% each. The first half of the range was divided into 4 steps (Steps
A-D), and employees would progress through the steps based on annual
satisfactory performance review.
The second half of the range was reserved for "performance pay". Once the
employee reached the top step (Step D), the employee's base salary remained at
that point, and the employee was eligible to receive up to the top of the range as
"performance pay" which was based on goal achievement, and paid out in a lump
sum payment in February of the following year. This performance-based pay
plan was called "P3".
The "performance pay" is considered "at-risk" because the employee has to re-
earn the money each year in order to be paid at the 60th %ile compensation level
set by Council. Therefore, the performance pay is not a "bonus" -- "bonus" pay is
beyond the position's market driven salary.
Because of the "at risk" nature of the pay plan, emploYees have raised issues
about the performance pay plan each year since its adoption. The salary plan was
adjusted in 1996 to add a fifth step (Step E), which resulted in a decrease in the
"at risk" pay from 13.25% to 8.48% or approximately 1/3 of the whole range.
This was also the year the City did not provide a cost of living adjustment to
employees.
The City has attempted to maintain salary ranges at the 60th%ile of the market by
providing cost of living adjustments comparable to other cities, by limited scope
reviews conducted in 1996 and 1997, and by reviews upon department request
only after 1997. The City has not done a comprehensive salary study since 1991.
Any changes to the plan are subject to bargaining with the City's unions.
Performance-based Pay Plan (P3) ProCedures
Goals are jointly set by the employee and supervisor by the end of March each
year. Department Directors review and approve the goals for each individual to
ensure consistency across the department.
The goals are intended to flow from the Council to the City Manager and each
level of management for consistency with the City's goals/budget objectives.
Each employee generally sets 3 - 4 goals. These may include team or individual
goals. The goals are to be as measurable and quantifiable as possible.
Each objective is weighted in terms of overall importance and the weight of.all
objectives equals 1.0. The supervisor determines the weights of individual
objectives. This includes a performance goal with the weight of .25 or .50 based
on the employee's position, and is based on the City's performance appraisal.
Goals are revised during the year if priorities change, or if the employee's
position changes. Employees and supervisors share responsibility for revising
goals in a timely manner.
During December, the employee and supervisor meet to discuss goal progress and
performance evaluation, and to determine the percentage of goals achieved.
Human Resources calculates the payment to be paid in February of the next year.
Employees may appeal individual award to the City Manager. In addition, awards
are pro-rated by the number of months of eligibility/participation for employees
entering or exiting the plan during the calendar/plan year. Participation in the
plan is not mandatory.
P3 Award History
Year # Eligible Ees Avg%Awarded Average Payment
1992 26 85% $3,211
1993 36 75% $3416
1994 56 82% $3690
1995 67 81% $4374
1996 58 95% $3142
1997 131 97% $3021
1998 160 97% $3206
1999 109 97% $3387
2000 112 99% $3582
2001 116 97% $3401
2002 149 96% $3513
III. Plan Strengths
IV.
The plan provides a method for employees to influence their income through their
own accomplishments, and assures consistently outstanding effort from
employees.
Employees can reach the maximum pay within 5 years instead of the 8 years in a
typical step plan.
The City benefits from specifying accomplishments that are in the best interest of
citizen and which support the City's overall goals.
Concerns/Administrative Challenges
The last comprehensive study of 23 benchmark positions of 49 total positions was
conducted in 1991, while consultants recommended comparisons every 3 years.
Salary reviews upon request only have resulted in problems with internal
alignment.
Exit interviews indicate that P3 is not a major factor in decision to leave City
employment, but is regularly mentioned as an aspect of employment that
departing employees did not like.
In recent years, starting salaries for new hires have moved toward mid-range
instead of remaining at the starting range, indicating that starting salaries are too
low for the candidates the City wants to hire. In 2000, 20 of the 29 employees
(69%) hired started at the A or B step, while in 2002, there were 15 of the 39
employees (38%) and in 2003, 21 of the 40 employees hired (49%) started at the
A or B step.
Memorandum
Date: January 8, 2004
To: Federal Way City Council
From: Iwen Wang, Management Services Director
Via: David H. Moseley, City Manager
Subject: 2005-06 Budget Outlooks
Key Council Question:
What. are the realities and constraints of the 05-06 budget revenues and expenditures?
What might be its potential impacts on City services?
Background:
The attached outline will provide the following background information:
1. An overview of the 2004 General/Street budget, and the six-year projection.
2. Proposed 50/06 budget development framework.
3. Where Federal Way per capita revenues and expenditures stand in King County.
4. Proposed public process and timeline.
Council Directions:
· Any changes to the budget development framework?
· Any changes to the proposed public process?
2005~06 Budget Challenges
At the 2004 budget adoption, we identified a number
of future budget challenges:
> $750k loss for Street Maintenance caused by 1-776
> Rising employee benefit costs - medical, state
pension, workers compensation growing faster
than inflation
> Slow revenue growth - slow sales tax recovery
combined with 1% property tax growth limit
· We now need to add the potential impact of
the new "25% Property Tax" rollback initiative
Baseline Budget Assumptions
Baseline budget focuses on the structural balance of the
budget, compares on-going revenues and on-going
expenditures for a six-year planning horizon.
Future projection assumes revenue to grow by inflation,
and expenditure increase only at 90% of inflation.
Baseline Budget does not include ,1-time funded programs.
Approximately $400k of these 1-time funded programs have been
continued for multiple years, including PSRC membership, newsletter,
lobbyist, interns, sister city travel, DV court advocacy (funded with
CDBG prior to 2004), human service supplement, ads commission
supplement, code amendments, 2 pso positions (initially funded by
COPS More grants), senior lunch program after KC discontinued their
funding, park maintenance supplement, and ROW damaged tree
replacement program.
Future Projection - Ongoing
Revenue/Expenditures only
Note:
1.
The mason 2004 base budget gap is greater than 2005 is due to ,the Admissions Tax will take effect in
2005. The'2004 gap reflects t~e loss of $750k from 1-766 and the initial gap for the new police officers
added and to be funded by Admissions Tax starting 2005, as approved by the coundl in 2002. The
gap is currently funded wilh 1-time sources (CM cuntJngency and cany forward from 2002).
Costs of other 1-time funded programs, such as those identified in the eadier slide, am not included in
this projected gap. If they were included, the gap would increase by $400k per year.
Long Range Outlook
Baseline General and Street Fund Projection
Baseline
Revenue less Pmperty Tax
Cities
Capita
Revenue
by Fire and
Costs
.~ =. :'~ Only 36 cities in comparison;
~':'"';.i '1 Itc C~tics of Pacific and
,~,~_.. J Snoqualnuc do not have
i[;~j ] sufficient dala to co~arc,
~and (hty of Milton has only a
small i)o~tion in King Coun~
Per Capita General Fund Revenues
! -~ 34th (was 33rd) of 36
I
Cities
I02
Capita
by Fire and
Costs
Only 36 cities in comparison;
The Cities of Pacific and
Snoqualmie do not have
sufficient data to compare,
and City of Milton has only a
small portion in King County
Per Capita General Fund Expenses
' 33~d (was 32nd) of 36
5
* The city's 2004 levy rate is $1.30 per $1000 AV.
Public ParticiPation
Online citizen survey
Presentations at community group meetings
(Spring - outlook; fall - recommendations)
Public hearings
> Preliminary pUblic hearings (solicit public input
during budget development)
> Official public hearing (on recommended budget)
Others?
6
Budget Calendar
Events Time
,-Council Retreat - Budget Direction January
,.Budget Open Houses/Community Meetings March-April
..Preliminary Budget Public Hearing May - July
,.Department Develop Budget Proposals
aCM Review Department Budget August
· ,Prepare recommendations
aCM Proposed Budget to Council October
· 'Department budget presentations to Council
· 'Public Hearing on Revenue Projection
mCouncil Deliberation sessions November
· ,Final Budget Public Hearing
· 'Council adopts budget/property tax levy
Council Direction
· Any changes to the budget
development framework?
· Any changes to the proposed public
process?