Towering changes: Building code amendments approved by Council

Chad Coleman/Mercer Island Reporter The Aljoya construction project along 76th Avenue S.E. takes shape  in the downtown business district on Mercer Island Wednesday. -
Chad Coleman/Mercer Island Reporter The Aljoya construction project along 76th Avenue S.E. takes shape in the downtown business district on Mercer Island Wednesday.
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Future developments in Mercer Island’s Town Center will now have to provide one of three potential public amenities in order to build to a height of five stories.

Last Monday, City Council members approved additional Town Center development codes, 6-1. The new codes require developers seeking five stories to provide either affordable housing, a single large public plaza or a pedestrian connection. Developers may build up to four stories with the former codes, which require a major site feature and three minor amenities.

The codes do not apply to developments under construction or already approved by the Design Commission. The new codes took about two years to formulate and get approved. They began as ideas brainstormed and filtered through an ad hoc committee and were eventually recommended by the city’s Planning Commission.

City leaders showed interest in fine tuning the development codes after the initial two developments were nearing completion and while several others were being approved by the Design Commission.

Councilmember Dan Grausz, who was on the ad hoc committee and serves as the council’s liaison to the Design Commission, said the new codes would succeed in bringing more public gathering spaces.

“The net result from this, years ahead, will be more affordable housing, far superior public plazas, and we’ll get some pedestrian connections that we had all sought to have built in the Town Center,” Grausz said. “There will also be a significant increase in retail uses, places where Islanders want to go to shop and dine.”

The ultimate goal of city leaders was to get developers to provide some affordable housing on the Island so city employees, such as police, fire fighters and teachers could find an affordable home on the Island.

Developers will now have to set aside a number of affordable apartments or condos equivalent to one-third the number of units or square footage obtained by getting the fifth story. For example, a new development that gains 45 residential units by going five stories instead of four will have to designate 15 of them as “affordable.” The units must be spread throughout the structure.

Those who qualify under the city’s affordable standard to purchase a subsidized condo must earn less than 90 percent of the King County Median, or $56,700 annually. Under that measure, the person may purchase a new condo for $200,000. The average price for a condo on Mercer Island that sold in 2006 was $375,000.

Those who earn less than $42,000 per year seeking to rent on Mercer Island will qualify for a discounted monthly rent. According to city documents, the 2006 average monthly rent for a two-bedroom on the Island was $1,210.

Affordable units would cost $970 a month.

According to city administrators’ calculations, “a standard equal to 90 percent of the King County median income would meet Council’s objective of providing affordable housing to approximately 50 percent of the public employee workforce.”

In a telephone interview last Friday, Michael Christ, the owner of SECO development, which built Island Square and is currently building the 7700 Central, said the affordable housing requirements will have an impact on decisions to build on the Island.

“The affordable housing is difficult to achieve and the reason for that is that we already set a new standard and there’s a quality people expect,” Christ said. “The land there is expensive and the construction costs are extremely expensive for buildings of this caliber,” Christ said. “I don’t think that I could have done [Island Square] with rent restrictions. The objective or the goal of the city is good, but it has an economic reality to it as well.”

Christ said Bellevue had tried something similar but the housing authority that assigns affordable units has a long list and can’t exclude applicants based on where they work. Christ said the units will go to those on the top of the housing authority’s list, not Island employees.

“I applaud the city’s goal, that people who work for the city should be able to afford to live there,” Christ said. “But it’s fraught with complexities. For construction of that caliber and quality, you don’t want to limit some of the revenue sources.”

Arthur Sullivan, the city’s affordable housing consultant, assured the Council that the new codes provide incentives to build affordable housing. By gaining the fifth floor, builders get more units than they lose to affordable housing, Sullivan said. “The rate of return for the builder increases overall,” Sullivan said.

“We made it more beneficial for builders with the provisions you have in front of you tonight. The prices may be below market value but equal to other properties you see in the state.”

While the majority of the Council members expressed satisfaction with the new codes, Councilmember Sven Goldmanis voted no because he thought the housing requirements would burden and discourage future development.

“The types of retail stores and restaurants we want to see won’t be able to afford the rents,” Goldmanis said. “Large corporations or offices will be the only companies able to afford the high rents that will result from this.

You have to have additional height. That will get you affordability.”

Goldmanis had suggested that the council permit a sixth story in exchange for building affordable housing. However, Council members did not approve Goldmanis’ proposed amendment.

“Time will tell whether we are successful or not,” Goldmanis said of the code.

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