Item A: EWEB Memorandum of Understanding

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During a joint work session of the EWEB Commissioners and City Council on May 30, 2007, elected officials met to discuss possible approaches to plan for the future of the EWEB riverfront. Both the board and the council acted to recommend an EWEB-managed, collaborative master planning process. The board and the council also directed the EWEB General Manager and the City Manager, respectively, to draft a memorandum of understanding with an outline of the steps leading to the disposition and redevelopment of the EWEB riverfront property, and to bring the outline back for discussion at a subsequent joint meeting between the board and the council. A draft of the MOU was developed by staff from both organizations, and was considered by the EWEB Commissioners on November 6, 2007. At that meeting, the EWEB Commissioners requested two changes in the draft MOU: 1) to clarify that City staff would not bill EWEB for the time spent assisting this process, and 2) to clarify that a mix of uses or activities can take place within one building, a cluster of buildings, or across the entire site. These changes have been incorporated into the draft MOU attached to the AIS. The draft MOU addresses the process for master planning the EWEB riverfront property and the necessary land use applications required for redevelopment. The MOU does not impose limitations on the City regarding the possible purchase of the property, or on EWEB regarding the possible sale of the property. Both of these critical issues are addressed below. 1. Declaration of Surplus & Decision to Sell EWEB has sole authority to determine whether to sell, the portions of property to sell, and the timing for declaring the property surplus. A declaration of surplus can be made by a majority vote of the board to approve a resolution declaring a parcel surplus and to authorize the General Manager to begin disposal of the property. EWEB must then offer the City the first opportunity to acquire the property for “other municipal purposes.” The price for the property will be determined by EWEB. The price could be based on an appraisal of the property using assumptions about the future use and value. EWEB has stated that the purpose of selling the property is to generate funds for the relocation of utility operations to the Roosevelt site, and is not likely to declare that any of the property is for sale until after financing for relocation is secured. EWEB Commissioners and staff have also expressed concern that a master plan may not result in land use and development scenarios of adequate property value to cover relocation. EWEB can decide not to sell, establish a different price, or qualify the master plan prior to submitting it for City approval. 2. City Acquisition of EWEB Property After EWEB declares the property available for sale and establishes a price for the property, the City has two main options: to request negotiations or to not request negotiations. If the City wants to acquire the property, the City Manager must request negotiations within 30 days of initial notification from EWEB. The City Manager and the EWEB General Manager could then negotiate an agreement to compensate EWEB for the property. The City would need to undertake a good faith effort towards negotiating a price for the actual purchase of the property. The master planning process could also begin at that time, if it is not already underway. Unless the language in the Downtown Plan and the Land Use Code is revised, the City could not close on the purchase prior to the approval of a master plan, since the lot line adjustments required to legally separate the parcels for sale are land use applications and cannot be approved until the master plan is approved. If the City chooses to acquire all or a portion of the property, currently available urban renewal revenues would be insufficient. In all likelihood, general obligation bonds, requiring a public vote for approval, F:\CMO\2007 Council Agendas\M071121\S071121A.doc