Update: The Council gave City Attorney Kari Sand and City Manager Noel Treat notes to use as they continue to work on the MICA lease. The lease is not currently on the Dec. 7 agenda, but could be added, Treat said.

A community arts venue subsidized almost entirely by private donors is facing another obstacle, again related to its proposed location in a park.

The Mercer Island Center for the Arts (MICA) has been negotiating with the city on a 50-year lease, of $1 per year. The proposed venue would be located in Town Center at the current Recycling Center, which is on a portion of Mercerdale Park. The lease went before the City Council on Nov. 16, but is still under review.

A Council task force looked at several locations for MICA and its main tenant, Youth Theatre Northwest (YTN), after YTN lost its home on school district property in 2013. They decided that Mercerdale would be the best option, though Mercer Island may need to alter its city code to make that site viable.

There is a wetland at the proposed premises that is more than two acres in size, and Mercer Island City Code (MICC) does not allow alteration of a wetland over one acre. On Oct. 30, City Attorney Kari Sand received a letter from Jeff Kray with the Marten Law Group outlining his opinion “that the MICC prohibits the City from allowing MICA to build as proposed because doing so would disturb protected critical area wetlands and buffers.”

MICA proposes mitigation to offset the impacts, and “MICA’s Board and consultants are confident that we can both protect and enhance the wetlands and complete this valuable addition to Island life,” according to a MICA press release.

Both the proposed lease and the city code prohibit MICA from building on the site unless the critical area issues are resolved and all conditions to issue a permit area satisfied.

“Given the MICC, to move forward with permitting and construction, the current proposal for the Center will either need to be revised to comply with the current Code (such as re-orient or relocate the building on the site, reduce the building’s footprint, or other revisions), or the City will need to update its wetland regulations,” according to the Council’s Nov. 16 agenda bill.

The development would be able to proceed in other cities that have recently adopted new wetland codes, though Kray said that if the MICC did not prohibit MICA’s proposal, the project may need approval from the U.S. Army Corps of Engineers and one or more Washington State agencies.

MICA has been the center of community conversation for months. It provided several arts programs over the summer, including Pianos in the Parks, and its supporters spoke passionately to the Council at several meetings. MICA’s wetland consultant, The Watershed Company, and its supporters say that the wetland portion of the city code is “ambiguous.”

This is not the first hurdle MICA’s proposed location has faced. A group of community activists calling themselves the Concerned Citizens for Mercer Island Parks raised questions about the precedent of leasing public land to a private group. They argued that open spaces are a valued resource on Mercer Island and that giving away a portion of parkland should be a community decision that requires an advisory vote.

The group is drafting an initiative, but the City Council also has the option to put a question to the voters in the form of a ballot measure.

An advisory vote could cost anywhere from $20,000 to $70,000, depending on when the election is held, and how many other items are on the ballot. The costs are split between all of the jurisdictions with ballot measures. A special election would be the most expensive.

The Council may consider the lease ahead of, and separately from, other building permit review issues, such as the wetland issue, Sand said, as MICA has not submitted a complete building permit application to date.

The lease as drafted requires that the final design of the Center project – including signage, landscaping, traffic flow and parking – will be subject to the city’s land use regulations (including wetland regulations) and building permit processes.

There are other “key issues going forward,” according to the agenda bill, including the need to find appropriate off-site parking acceptable to the city, as the site cannot accommodate parking.

But the lease also describes the community benefits: removal of the old Recycling Center buildings; public/city use of facility for arts and education classes, public meetings, and recreation; and a back-up Emergency Operations Center. The lease requires the MICA building project to make upgrades to the Northwest Native Garden and Bicentennial Park and support the Farmers Market and Summer Celebration with new public restrooms, storage facilities, utilities and an outdoor stage.

Lease approval will enable MICA to begin the permitting, planning and fundraising necessary to build the venue. So far, it has raised $5 million of the $25 million needed for its capital campaign.