WHEREAS, the City determined that 10 parcels of land in the South Lake Union neighborhood were surplus to the City's needs; and

WHEREAS, Resolution 30080, which was adopted by the City Council with the Mayor concurring, set forth the public policy objectives to be achieved through the disposition of these parcels; and

WHEREAS, on May 18, 2001, City Investors, Inc., and the Mayor signed a Purchase and Sale Agreement (PSA) which, subject to City Council approval, would provide at least $ 20.2 million plus estimated interest earnings of $1.5 million, and other non-monetary benefits in consideration for eight of the surplus parcels; and

WHEREAS, seven of the eight properties were originally acquired for transportation improvements in the South Lake Union neighborhood which were to provide both neighborhood and regional benefits; Now, Therefore

BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEATTLE, THE MAYOR CONCURRING, THAT:

1. PURPOSE: The Council desires to set broad guidelines for the use of revenues associated with the disposition of eight of the surplus City parcels in the South Lake Union neighborhood which: 1) are consistent with the public policy objectives for the disposition of the land as established in Resolution 30080 and 2) target achievement of those objectives which have not and are not expected to be fully achieved by other means including, but not limited to, City Investors, Inc.'s responsibilities under the terms of the Purchase and Sale Agreement (PSA). The revenues in question are the sale proceeds pursuant to the PSA and any interest earnings on funds derived from these revenue sources.

2. TRANSACTION COSTS: Approximately $751,000 of the sale proceed revenues will be used to reimburse the City's costs of disposing of the surplus properties. Attachment A itemizes these costs, with approximate amounts for each.

3. FAIRVIEW-VALLEY CORRIDOR REALIGNMENT PROJECT: Approximately $4,690,000 of the sale proceed revenues will be used to reimburse the City costs already authorized and incurred for the Fairview-Valley Corridor Realignment Project. An additional $50,000 will be incurred to determine the geometric alignment of the Fairview-Valley intersection and will be appropriated on a reimbursement basis through separate legislation upon closing. Other Fairview-Valley Corridor Realignment Project costs will be considered as part of South Lake Union Transportation Projects as noted in Section 6 below.

4. LEGAL RESERVES: Approximately $5,000,000 of the revenues will be set aside as a legal reserve to support litigation and any required City buyback of parcel 14 pursuant to the PSA. $4,700,000 of this reserve will be held within the Cumulative Reserve Subfund South Lake Union Property Proceeds Subaccount (0016X), per the Ordinance that adopts the PSA. The remaining $300,000 will be appropriated to a litigation reserve through legislation to be adopted by Council at the time of closing. At the time these reserves are no longer required under the PSA, which will be no later than 30 months from the date of closing on the four parcels east of Westlake Avenue N., any unexpended funds will be used half for parking and mobility improvements in the South Lake Union neighborhood and half for affordable housing consistent with Section 5 following, subject to Council approval of individual projects. The Executive will propose uses for any unexpended portion of these legal reserves when the likely amount is known. Per Section 1 above, and the Ordinance that adopts the PSA, interest earnings accrued to these reserves will be held and accounted for in conjunction with overall revenues resulting from the transaction.

5. AFFORDABLE HOUSING: In addition to any funds for affordable housing made available per Section 4, another approximately $2,250,000 will be used for affordable housing. This housing is to be affordable to households with incomes at 60% or less of the Seattle area median income as defined by the City of Seattle Office of Housing and is to remain at this level of affordability for no less than 40 years. It is the Council's intention that the amount ultimately committed per this Section 5 to affordable housing from revenues generated from the property transaction per Section 1, be sufficient, when taken together with any non-City funding directly leveraged by these funds, to provide no less than 50 such units. These units shall be located in the South Lake Union neighborhood outside the Cascade area or located in other nearby areas convenient to the new jobs expected to be created in the South Lake Union neighborhood (including Center City and the Eastlake neighborhood). This housing will encompass a range of unit sizes including some appropriate for families. The Office of Housing shall pursue partnerships with major employers in South Lake Union and nearby neighborhoods to provide affordable workforce housing.

6. OTHER SOUTH LAKE UNION TRANSPORTATION PROJECTS: The remaining revenues, expected to be at least $9,000,000, will be used for transportation improvements in the South Lake Union area. Attachment B contains a list of candidate projects identified by SeaTran at this time, with a preliminary total cost. Authority to expend revenues for transportation is contingent on ultimate Council approval of individual projects. In approving projects, the Council will consider each project's cost-effectiveness, consistency with the public policy goals in Resolution 30080, the benefits both to the neighborhood and the broader region, consistency with neighborhood plans, and leveraging of outside funds.

7. IMPLEMENTATION MEASURES/WORK PROGRAM:

A. For the Office of Housing: Within three months after the closing on the Subject Properties, the Office of Housing will present to the Council an implementation plan and schedule for achieving the affordable housing goals of Section 5 and a proposed schedule of reports or briefings to keep the Council apprised of progress and problems in achieving Section 5 affordable housing goals and the market rate housing goal in the PSA. Upon Council approval of the implementation plan and schedule, funds will be appropriated through separate legislation.

B. For SeaTran: Within three months after the adoption of this Resolution, SeaTran will recommend to the Council the transportation improvements proposed for use of Section 6 funds, along with estimated project costs, recommended funding structure. Additionally, SeaTran will submit a schedule for providing additional project-specific information to the Council that will be sufficient to allow the Council to consider each of the factors in Section 6 in determining whether to approve the project.

C. For the Office of Economic Development (OED): OED will provide the Council with annual updates on 1) progress in implementing the terms of the Purchase and Sale Agreement which will incorporate purchaser's (City Investors, Inc.) annual report to the City on same; 2) use of the sale proceeds (with the assistance of the City Budget Office and the Department of Finance); 3) progress in achieving the public policy objectives for the disposal of the South Lake Union set forth in Resolution 30080; 4) progress in achieving the environmental cleanup of parcel 14 through litigation and

other means (with the assistance of the Law Department and the Fleets and Facilities Department); 5) City Investors, Inc.'s progress toward and compliance with the deadlines for development in the Purchase and Sale Agreement (with the assistance of Department of Construction and Land Use): and 6) an overview of South Lake Union development issues, including other City programs and actions affecting the area development.

D. For the Strategic Planning Office (SPO): SPO will be the lead City Department in addressing the provision of adequate public parking for the South Lake Union Park and the planned Maritime Heritage Center at the Park. SPO (with the involvement of SeaTran, the Department of Parks and Recreation, the Fleets and Facilities Department, the Department of Construction and Land Use and the Office of Economic Development) will work with City Investors, Inc. to explore the feasibility of cooperative solutions to parking needs and will report to the Council on progress.

Adopted by the City Council the _____ day of _______________, 2002, and signed by me in open session in authentication of its adoption this _____ day of _______________, 2002. ________________________________________ President _____________of the City Council

THE MAYOR CONCURRING: ________________________________________ Paul Schell, Mayor

Filed by me this _____ day of _______________, 2002. ________________________________________ City Clerk

Attachment A Attachment B June 20, 2001 version 6 Attachment A to Resolution 30334 Property Transaction Costs

Item Cost

Market and financial analysis "37,500" Urban design analysis "32,500" Misc. transaction related expenses "7,500" Environmental due diligence "138,100" RFQ "5,500" Appraisals "53,300" Negotiation services "338,100" Council consultant "33,000" RES appraisal & title staff "45,000" Survey and legal description "7,300" Escrow fees "40,000" Transaction/Closing cost contingency "13,200"

Total "751,000"

Attachment B to Resolution 30334 -

Candidate transportation projects for SLU:

1. Fairview / Valley Corridor improvements:

2. Roy St. Crossing at Aurora.

3. Streetscape Improvements (Westlake/ 9th Ave. couplet from Valley to Denny , Mercer: Fairview to Westlake.)

4. Channelization, Signage and Mobility Improvements (enhancements to Republican, enhance Harrison St, bike lane on Fairview, etc.)

5. Signal Improvements (various corridors).

Further detailed engineering needs to be completed on all of these proposals. Depending on alternatives selected the cost would be in the $30 million to $40 million range.