More than 30 people spoke at the continued public hearing on March 16 about Mercer Island’s moratorium and what has become known as the “Hines exemption” – as the ordinance preventing the city from accepting or processing building permits in Town Center doesn’t include a five-story, mixed-use development planned for the heart of the area.

After hearing comments on both sides of the issue, which boils down to whether Islanders want a “vibrant,” dense downtown or a smaller, “village” feel, the City Council decided to hold up its original ruling. The city will continue the “pause” on new building while evaluating and revivsing its Town Center codes, and will keep Hines exempt.

Five of the seven Councilmembers concluded that the benefits the Hines project could bring to the Town Center – including the potential for 200 stalls of commuter parking, a high-end grocery store like Whole Foods and a public plaza along S.E. 29th Street – plus the legal risk that could come with delaying the progress of a fast-tracked developer, outweigh public concern about the scale of the building and the risk of litigation regarding equal protection claims.

Two other Island property owners and developers – Leon Cohen (owner of the Twenty Four Eleven/Freshy’s site) and James Cassan’s Dollar Development Co. – have asked for an inclusive moratorium, or for additional exceptions for their planned Town Center projects.

Councilmembers Mike Cero and Jane Brahm said they support the moratorium, but not the Hines exemption.

Cero said that “it doesn’t matter if you’re one yard from the vesting line or 100 yards,” and the city shouldn’t treat one project differently in the middle of a blanket policy.

Others said that the Hines project is a “unique opportunity” for the city. Hines worked for several years to assemble three parcels, including the King Property, the Bitney property and the Mud Bay and Veloce Velo site at the south end of the block bound by 77th Avenue S.E., 78th Avenue S.E. and S.E. 29th Street. The property owners have told the Council they are eager to sell.

Evan Kaseguma of Hines said that if the project was included in the moratorium, “the land assemblage dies and the public benefits will be killed.”

“These are not idle words. They are not threats. It’s the truth,” he said.

Kaseguma said the project would have been vested already if Hines hadn’t agreed to negotiate with the city in good faith about the possibility of building commuter parking.

Hines also wrote a letter agreeing to give the city 15 days notice before filing a building permit and becoming vested. Deputy Mayor Dan Grausz said he solicited that letter from Hines.

“I’m not happy that we don’t have a lot of things in hard, fast writing,” said Councilmember Benson Wong. “But I believe that this letter is something we can hang our hats on.”

Brahm said that Hines can show its sincerity and willingness to work with the community by waiting until the moratorium is over to file a permit.

“We have a letter and a promise,” she said. “There’s no guarantee … It could be a good project for our community, but there are too many unknowns.”

Citizens are worried that the building will change the character of Mercer Island’s downtown area. Some said that they are more than happy to go to Bellevue or Seattle for retail and restaurants. They worry that creating a denser downtown will overload schools and city services. A seventh grader at Islander Middle School told the Council that hallways and classrooms are already crowded.

While others said that with the Mercer Island Center for the Arts and light rail coming soon, more dining, shopping and parking options are needed, all agree that the current Town Center isn’t what they would have envisioned or planned.

Many asked for an all-Island vote or survey. A community engagement and stakeholder group process was recently established as part of the Town Center visioning work that began last year.

“We started this journey long before any of us had heard of Hines,” Grausz said. “We started seeing an agenda packet for the Design Commission, so we all had to sit there and go through some very hard thinking as to how (Hines) fit into what we’re doing (with the Town Center visioning). They were operating under a development code that we had all identified nine months earlier as having deficiencies.”

The Town Center visioning and code revision process are some of the reasons the city cited to justify the moratorium.

“I think with our vision for our Town Center, there’s going to be a lot less contention than folks think,” said Mayor Bruce Bassett. “We’re all looking for an amazing Mercer Island … we’re all looking for roughly the same things, but this Hines project is a weird thing sitting in the midst of that.”

Hines is also further along than any other project, Bassett said.

“Going forward, we’re going to have something better. Hines is going to be this transition thing,” he said. “We’re going to try to make it into that better thing, but we’re going to have to do it with some sort of agreement with them, not with this new code we’re going to end up with.”

For more information on Town Center, visit the city website.