Contact Person/Phone:

DOF Analyst/Phone:

Parks and Recreation

Tim Morrison / 5-1759

Tim Morrison / 5-1759



Legislation Title:

AN ORDINANCE relating to a future historical museum in downtown Seattle; authorizing the amendment of a restrictive covenant, easement and contract with the Historical Society of Seattle and King County, doing business as the Museum of History and Industry (MOHAI), in order to reduce a termination payment and to extend the time for opening such a museum.


·        Summary of the Legislation:

The ordinance authorizes the amendment of an agreement between the City and the Historical Society of Seattle and King County, doing business as the Museum of History and Industry (“MOHAI”), to extend the date by which MOHAI is to open an historical museum in downtown Seattle, or make a payment to the City, from January 1, 2007 to January 1, 2017, and to reduce that payment from $2,000,000 to $1,000,000, in exchange for reduced rent payable to MOHAI on the lease for the Temporary Central Library.  The ordinance also authorizes execution of related documents.


·        Background: (Include brief description of the purpose and context of legislation and include record of previous legislation and funding history, if applicable):

Pursuant to Ordinances 120584, 120816 and 121151, the City has paid $2,000,000 from the Cumulative Reserve Subfund to the Washington State Convention and Trade Center (“WSCTC”) for use and access rights and various public benefits during the initial 16 years of operations of an historical museum at the expanded Convention Center.  Under the agreement, if an historical museum does not open by January 1, 2007 or if certain other circumstances occur, the $2,000,000 must be returned to the City with interest.  Since June, 2001, the Temporary Central Library has occupied that future museum property (the “Property”).


In December, 2003, MOHAI purchased the Property from WSCTC, with the intention of developing an historical museum.  MOHAI assumed the WSCTC’s obligations under the agreement described above (the “Prior Covenants”) and granted a deed of trust to secure MOHAI’s financial obligations.  MOHAI also assumed the lease for the Temporary Central Library, which calls for monthly rent of $200,000 from December 20, 2003 through June 30, 2004.  In negotiations involving the Mayor’s Office and City Council, MOHAI agreed to reduce the Library’s rent for that period by approximately $1,000,000, in exchange for (i) a reduction in amount to be returned to the City from $2,000,000 to $1,000,000, if the Prior Covenants are terminated and (ii) an extension of the date for opening of an historical museum on the Property from 2007 to 2017.


·        Please check one of the following:


____    This legislation does not have any financial implications. (Stop here and delete the remainder of this document prior to saving and printing.)


__X_   This legislation has financial implications. (Please complete all relevant sections that follow.)


Appropriations: (Please only reflect the dollar amount actually appropriated by this legislation.)

No funds are appropriated by this legislation. 

The Seattle Public Library pays rent on the Temporary Central Library from its Operating Fund, which receives 98% of its revenue from the City’s General Fund.  The 2004 Adopted Budget for the Library assumes the savings in rent resulting from the agreement described above.

Anticipated Revenue/Reimbursement: Resulting From This Legislation:

No revenues are anticipated as a result of this legislation.  However, should MOHAI not open a Historical Museum by 2017 (or if before this time MOHAI should decide to terminate the restrictive covenant), the result of this legislation is that the payment owed to the City will be reduced from $2 Million to $1 Million

Total Regular Positions Created Or Abrogated Through This Legislation, Including FTE Impact:



Spending/Cash Flow: (Please complete this section only in those cases where part or all of the funds will be spent in a different year than when they were appropriated (e.g., as in the case of certain grants and capital projects.)



·        What is the financial cost of not implementing the legislation? (Estimate the costs to the City of not implementing the legislation, including estimated costs to maintain or expand an existing facility or the cost avoidance due to replacement of an existing facility, potential conflicts with regulatory requirements, or other potential costs if the legislation is not implemented.)

If the legislation is not implemented, the cost of the extended Library lease will be $1 million greater than what is provided in the 2004 adopted budget.  A supplemental appropriation would be necessary in order to maintain Library services at the level planned for 2004.


·        What are the possible alternatives to the legislation that could achieve the same or similar objectives? (Include any potential alternatives to the proposed legislation, such as reducing fee-supported activities, identifying outside funding sources for fee-supported activities, etc.)

From the point of view of MOHAI, the Library, and the representatives of the City Council and Mayor’s office who facilitated the negotiation, this legislation is in the best interest of all parties.


·        Is the legislation subject to public hearing requirements:  (If yes, what public hearings have been held to date, and/or what plans are in place to hold a public hearing(s) in the future.)



·        Other Issues (including long-term implications of the legislation):