City selling South Park Neighborhood Center building? Tuesday night meeting, and what we’ve found out

A community meeting has been called for 7 pm Tuesday night (June 17th) at the South Park Neighborhood Center to discuss concerns/questions raised by news the city-owned building might be sold.

The mailing-list discussion over the weekend led us to contact city reps on Monday to see what we could find out, since, in our experience covering proposed sales of city-owned properties of various sizes in West Seattle, there is usually a relatively sizable amount of public outreach and notification well before a sale is authorized/made, including solicitation of public comments, announcements through news media, and more, and we hadn’t heard about anything along these lines in this case.

First thing Julie Moore from the city Department of Finance and Administrative Services wanted to clarify was: No sale is pending, and indeed, a lot of public process would ensue before one could be made.

She had a lot more to say, in response to our questions, and pointed to a lot of background information for those interested – bottom line, it’s a complex situation:

The South Park Neighborhood Service Center (SPARC) is one of six City-owned buildings housing private nonprofits through what’s known as a “Mutual and Offsetting Benefit” (MOB) lease. Such leases allow the tenants to pay the City rent, in whole or in part, through the public services they provide. With the exception of the Southeast Seattle Health Clinic, which was built with County bond funds in the late 1980s, these buildings were City-owned facilities that either became surplus in the 1960s or 1970s, or that the City had acquired during the same time period for the specific purpose of having private nonprofits provide social services.

Normally rent pays for building upkeep. That has not been the case with MOBs.

Because MOB tenants’ rent does not cover full maintenance costs, the City has had to utilize other resources, such as the General Fund, to keep its MOB buildings in good repair. For example, in its 2012 proposed budget, FAS included $1.9 million in unprogrammed funds from a property insurance settlement to repair and replace roofs at a number of MOB facilities. This ad hoc funding strategy has resulted in building maintenance deficits, and buildings that are not well suited for the programs they house. Adopted City policy calls for increasing rents to pay for building costs, but rents have never been increased because these tenants have limited ability to absorb a larger share of the rent without needing to cut services to targeted populations

During 2012 budget deliberations, the City Council focused on this problem, and issued a statement of legislative intent (SLI) requesting two reports, the first of which was transmitted to the Council on April 2, 2012, summarizing cost and funding options to complete near-term repairs at City-owned buildings that have MOB tenant leases. The second part of the SLI called for:

“…a review of the present MOB situation, policies for MOB leases, and options for MOB facilities, including disposition of the property to current tenants or entities that would ensure that the buildings continue to be leased to organizations providing a public benefit. This report shall be developed with input from current tenants and be informed by a survey of current MOB tenants to assess their ability to pay the lesser of fair market rent or standard City rent for similar facilities.”

The response to the second half of the SLI request was published Aug. 15, 2013, and you can read it here: clerk.ci.seattle.wa.us/~CFS/CF_312305.pdf. (Please see page 30 of this document for the April 2, 2012, report mentioned above.)

One of the options identified in the SLI is to transfer buildings to MOB tenant organizations where feasible. That is what we are exploring with the SPARC facility. We are in the very early stages of fact-finding related to a discussion about transferring the building to the Providence Regina House, which runs the food and clothing banks at SPARC. We understand this facility is a beloved part of the community. This is why, as part of this process, we are trying to work with all existing tenants to understand their current programs in the hopes of crafting a “win-win” agreement that will ultimately provide a more functional asset for the community.

You are correct that there is extensive process required by City policy in order to authorize the sale or transfer of City real estate. We don’t know yet whether the kind of “win-win” opportunity we seek is even feasible, and so there is no transfer or sale to propose. Absent such an opportunity, we do not expect to propose the sale of the building in the near future. Therefore, the time is not yet right to gear up a community process. In the event we do identify a “win-win” opportunity, there will absolutely be an outreach process and specific notice to both community organizations (including SPARC tenants) and neighbors. Responses and input provided by the community is part of the information provided to the City Council at the time they begin consideration of a sale.

(The PDF document linked in the third-to-last paragraph above includes a significant amount of background specific to South Park, including correspondence and details of discussions.) Moore also confirmed that city real-estate staff will be at the Tuesday night meeting in South Park.

Meantime, we sent an inquiry to a media liaison for Providence, but have not heard back.

ADDED: Providence has since replied. Bottom line: Same thing the city says – it’s very early in the process.

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