The City of Seattle wants downtown property owners to pay a minimum of $200 million (and potentially up to $418 million) for hugely expensive additions to our waterfront park.
We are in favor of the waterfront park and have already contributed to its significant public funding. What we oppose is the additional funding mechanism called the Local Improvement District, or LID.
If the LID passes, there will be consequences for all of Seattle. Here’s why.
By its very mission, the waterfront park is meant to be a park for all. It serves the wellbeing and image of the City as a whole by restoring native plants and ecosystems, by creating bike lanes and walkways, and making it a more inviting space for residents and visitors alike.
We support the creation of the park. What we oppose are the extravagant additional features that the city simply can’t afford.
The photo below, from the Waterfront Seattle website, substantially depicts what the Seattle Waterfront will look like without the proposed Local Improvement District, or LID.
What the waterfront park would look like without LID funding? The City of Seattle Office of the Waterfront will not release an official image despite requests. This rendition is what we gather from meetings and email exchanges.Downtown property owners, along with other taxpayers, are already funding removal of the Alaskan Way Viaduct, construction of a new landscaped boulevard at waterfront level, the creation of the new waterfront walkway created by the seawall project, and rebuilding Pier 62 for public events and water access.
But the City wants more. The City of Seattle has spent years and unknown costs to develop an additional funding mechanism, the LID, that can raise as much as $418 million for the City’s coffers by asking property owners to pay for it. Read about the LID on the official website.
The money raised from the LID is meant to bring literally millions more tourists and shoppers to the downtown Seattle waterfront:
• $100 million to create an elevated ramp from the Pike Market to the waterfront
• $66 million to demolish and rebuild the existing park at the base of Union Street
• $60 million to add plantings and kiosks to the existing waterfront walkway
• $20 million to improve streets around Pioneer Square
• $20 million to improve streets along Pike and Pine up to 8th Avenue
• $13.3 million for a viewpoint and elevator access to the waterfront from Union Street
This is an estimated total cost of about $328 million when the City adds its overhead fees and contingency.
The $328 million is part of a larger $1 billion project to improve the waterfront.
Downtown property owners will pay for the LID, should it become law. Downtown property owners already contribute to funding the $1 billion+ waterfront project, as well as citywide park improvements.
Many people equate downtown property owners with large multinational corporations. There are about 1,000 commercial properties who are targeted to pay the LID. There are over 5,000 individual households. These include retired and other people living on fixed incomes, freelance workers, and families who are struggling to keep up with the rising costs of living in Seattle. Many have lived downtown for a decade or more, purchasing their property when downtown was one of the more affordable neighborhoods.
The City of Seattle commissioned an expensive and lengthy appraisal study, which shows that downtown property owners could pay as much as $418 million towards the LID. (Incidentally, the special appraiser hired by the City of Seattle acknowledges that none of the examples from their study of other cities are closely comparable to Seattle.)
The City of Seattle made the decision to take roughly half of that, or $200 million, from property owners. City officials have reassured us that the LID assessments will be capped at $200 million. They promised to write the ordinance as a one-time charge. Ordinances, they say, are the law; they cannot be broken.
But ordinances are overturned all the time. Those same city officials conceded that the law states that once a LID-funded project starts, it must be completed as written. If the city runs out of money, it must still pay for the project in its entirety. Seattle is notorious for its fundraising shortfalls and cost overruns (bike lane cost overruns, First Avenue Streetcar cost overruns, just to name two recent examples).
If the massive waterfront project goes over budget, a future City Council is legally bound to pay for it. The city rightfully has many urgent priorities, including funding education and creating more affordable housing. It may have no other choice than to pass a new ordinance to collect the balance of the $418 million LID. They can do this without doing a new appraisal study.
Downtown property owners may look up their proposed assessment on the city website.
The average commercial property owner is projected to pay $117,000 (or up to $233,000 if there are cost overruns).
The average residential homeowner is projected to pay $5,434 (or up to $10,870). For homeowners who cannot afford to pay a lump sum, with interest, the assessment would grow to approximately $8,000 (or $16,000 if there are cost overruns). The interest rate in this calculation is based on the City of Seattle’s April 2018 presentation.
Washington State law allows municipalities or their property holders to create LIDs. LIDs have, in fact, been used for nearly a century.
The waterfront LID would, by far, be the largest LID in state history. Normally, LIDs are used for much smaller projects, for example, to build local roads or fix sewer pipes, that directly benefit locals.
Local property owners could petition to create a LID. That’s what happened with the South Lake Union Transit and Third Avenue bus tunnel projects in Seattle. The waterfront LID, which is different because it is being imposed on us by the legislature, also stands out because it is eight- to 200-times larger than the previous LIDs, respectively.
The waterfront LID may follow the letter of the law, but a project like this was arguably never the spirit of the law.
This LID is unjust and it is unaffordable.
This LID is a terrible precedent for other neighborhoods. If the waterfront LID becomes law, Seattle will use LIDs again to circumvent property taxes limits and impose new LIDs in any neighborhood where city officials have new projects.