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By City Councilmember Nick Licata.
Urban Politics (UP) blends my insights and information on current public policy developments and personal experiences with the intent of helping citizens shape Seattle’s future.
Vulcan Acquistion Impact On South Lake Union
Vulcan Inc. announced last week the purchase of a significant piece of property in the South Lake Union neighborhood. The owner of the William O. McKay Ford-Lincoln Building at 601-609 Westlake North has sold his property, which has been in his family since 1922, to Vulcan Inc. The tenant of the building is the Seattle Auto Center, selling Jaguar and Land Rover and Seattle Nissan.
This new Vulcan property acquisition is part of a land deal that may be used to help the Executive implement its plans to expand Mercer Street, at a cost of up to $150 million dollars. The City has paid for numerous transportation studies for this area. Two of these studies have come to the same conclusions that widening Mercer Street from a one-way 4-lane configuration to a two-way 8-lane configuration does little to decrease travel times or increase road capacity.
This most recent acquisition also brings the total holdings of Vulcan Inc. to 53 acres in the South Lake Union neighborhood. As their holdings increase the business makeup of SLU begins to change, which effects the number and type of jobs as well as the property tax base in SLU. In this instance, there is an immediate loss of jobs.
I’ve been told that the dealership at this site employs more than 150 people and contributes significantly to the City’s tax base. There were plans for a major expansion. They had made recent improvements to the property. If forced to relocate, will they be able to find another location within the City to reopen shop, or will those jobs and the tax revenue be shipped out of the City?
The City’s growth numbers for South Lake Union show that the most recent year for which the City has current numbers, between 2000 and 2001, nearly 2000 jobs were lost. I’m interested in what has happened to jobs in 2002 and 2003 because reliable sources in the neighborhood tell me that the Vulcan property acquisition and leasing practices have contributed to the loss of jobs and displacement of businesses that have been a historic economic engine for Seattle.
The City’s studies show that there was loss in many neighborhoods, besides SLU, during this same period of time. Indeed, there was a citywide loss. Yet the loss of 2,018 jobs in SLU represented 23% of the total city job loss and stands out from other neighborhoods that have a similarly sized job base such as Belltown, Denny Triangle, First Hill and the University Campus. All of them but the Denny Triangle, which had a slight decrease, had an increase in jobs.
I feel that we really need to take a closer look at why. To that end my office staff has requested assistance from the Executive in collecting data on how many businesses and if possible what type of businesses have left the SLU neighborhood over this period of time. In addition, the Executive has contracted Paul Sommers, Senior Research Fellow Ph.D, at the University of Washington/s Evans School to do a cost-benefit analysis of public investments in this neighborhood. I’ve asked that they share a draft copy with the Council before releasing it publicly to Council Members an opportunity to review it.
The code amendment legislation that the City Council is currently considering states: “the City Council adopted Resolution 30610 affirming the City of Seattle’s commitment to making the South Lake Union area the region’s most competitive location for biotech research.” This resolution is a building block supporting the passage of land use code amendments to encourage biotech development.
Encouragement is good, but displacement is bad. In other words, let’s use our local talent pool to attract new biotech businesses. But let’s minimize displacing existing businesses. The Council’s Resolution 30610 recognizes this goal by supporting South Lake Union as a “mixed use neighborhood with an emphasis on small business and light industry”.
South Lake Union for many years has been a steady workhorse in providing a home for business start-ups with its relatively affordable leases and easy access to downtown. Allowing this diversity to be replaced by a “mono-culture” of high tech or biotech businesses will increase our region’s exposure to national economic swings. We must act prudently to avoid that risk.
As we go forward in redeveloping SLU, let’s do it in a manner that makes it at attractive place to work and live. The same Council Resolution says that the City desires to “encourage development of incentives that encourage preservation, reuse and rehabilitation of historically significant structures in the neighborhood.” Consequently we need to require pedestrian friendly building design that protects the historic character of SLU as developers take advantage of the new proposed land use codes.
It’s apparent that with the potentially conflicting objectives described above we must ask what is happening to jobs and tax base in SLU? Are we losing jobs and tax revenue in the short term? Is that loss located primarily at properties that will be eligible for the proposed biotech code amendments? Are the City’s actions contributing to chasing away a diverse mix of existing businesses that can contribute to employment and our tax base today for the promise of biotech jobs in the future? How much will they contribute to the tax base if these future businesses are able to apply for a variety of tax exemptions?
Since the Council has decided to delay a committee vote on the South Lake Union Biotech amendments until the results of a SEPA appeal filed with the Hearing Examiner are known, we should take the time now to get answers to these questions. Otherwise we will be moving ahead without knowing what consequences may result.