Update from March 16 City Council meeting: The Council voted 5-2 to maintain both the moratorium and the Hines exemption.

The legality of Mercer Island’s four-month moratorium on downtown development was questioned by citizens, local developers and at least one Councilmember at the City Council meeting on March 2.

Many opposed the city’s decision to exempt the controversial proposed five-story mixed-use development, called the Hines project, from the moratorium. In two weeks, after seeking more legal advice, the Council is set to discuss a revised moratorium – one that includes Hines.

“Nobody is against growth,” Save our Suburbs (SOS) group leader Tom Acker told the Reporter. “We just want it to be done tactfully and conscientiously. The city hasn’t been able to show that it has the control measures in place to keep Mercer Island from being exploited, and that’s why SOS is asking for an inclusive moratorium.”

City Attorney Katie Knight raised concerns about the potential for the developer to sue the city when the idea of putting a pause on Town Center development was first discussed. Conversations about the possibility to include 200 commuter parking spaces in the Hines design delayed the developer’s “fast moving progress,” Knight said.

But some citizens think that the exemption may have opened the door to other lawsuits, criticizing the lack of transparency and reasoning behind it.

Two developers came to the Council meeting on March 2 to show that they have been working with the city as long, or longer, than Hines has.

Leon Cohen, owner of the property at the base of the S.E. 24th Street at 76th Avenue N.E. where Freshy’s is located, said that if Hines is exempt, he should be too.

A boutique hotel planned by Dollar Development president James Cassan “stands in the same place as Hines does” in respect to talking and working with the city, Cassan’s lawyer said at the meeting.

About 20 residents also addressed the Council during a public hearing on the moratorium. Some spoke against delaying development, saying that the Island needs a more vibrant downtown. Others said that the city should put any new projects, with no exceptions, on hold until it completes its work on the Comprehensive Plan and Town Center visioning processes.

Some residents have previously argued that by state law, the Hines project has not been “vested.” A developer or property owner is vested when it has submitted a complete building permit application to the city.

On Feb. 17, members of SOS requested that the city obtain an legal opinion on the moratorium and the legality of the Hines exemption from outside counsel. A few days later, a group of citizens wrote their own findings of fact supporting the moratorium and questioning the Hines exemption.

The Council was provided a full legal analysis on moratorium issues prior to its decision to enact it in early February, but that analysis is attorney-client privileged communication and not disclosable, Knight said.

Councilmember Mike Cero said he was worried that attorney-client privilege would “handcuff” the Council’s discussion, but was told that waiving that privilege could hurt the city in potential future litigation.

The city’s outside attorney had a family medical emergency this week, and wasn’t able to consult with the Council on recently raised questions, said Mayor Bruce Bassett. The Council delayed a decision until their next meeting on March 16, when Knight said she would present an ordinance that removes the Hines exemption.

Most of the community concern regarding Town Center architecture and growth seemed to be directed at Hines after they presented a massing study to the Design Commission in December 2014 after acquiring a third parcel at the south end of the block bound by 77th Avenue S.E., 78th Avenue S.E. and S.E. 29th Street.

Hines hosted an open house on Feb. 26 at the Mercer Island Community and Event Center, with developers, project managers and design and landscape architects there to field questions about the building height, the retail space that may include a specialty grocery store and the public plaza planned along S.E. 29th Street.

The moratorium was discussed at the Council meeting on Feb. 2 and enacted on Feb. 16. Cities are required to hold public hearings within 60 days of enacting moratoria to explain the reasoning and facts supporting them, and provide an opportunity for community input.

Mercer Island’s moratorium is justified by its Comprehensive Plan update and Town Center visioning process, Knight said. Other facts are included in the city’s March 2 agenda bill.

Citizens will have a chance to share their thoughts on Town Center at public meetings the week of March 9, and at the City Council meeting on March 16, as the public hearing will remain open until then.

The city will continue to review impact fees and Town Center codes while the moratorium is in effect. It is scheduled to end on June 16, but can be extended by the Council with another ordinance.