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Friday, November 30, 2007

The Mayor’s $5 million X-Mas Gift to Vulcan

posted by on November 30 at 8:30 AM

Originally posted late yesterday afternoon.

Earlier this week, I reported that Deputy Mayor Tim Ceis had changed his tune about Vulcan’s development plans in South Lake Union.

Months ago, he told me Vulcan would not be able to get zoning changes (build higher than code) for a pending development on the two blocks between John and Harrison and Terry and Boren without kicking in for public benefits—like contributing millions of dollars for affordable housing according to the terms of pending council legislation.

But now he’s saying the City needs to move ahead with the Vulcan deal even if Vulcan wouldn’t be contributing as much to a public benefits fund as pending council legislation would have it.

The dreaded flip flop.

Ceis didn’t call me back in time to comment for that report, but he did call late that afternoon after I posted, to leave this message about it:

“Hey, your Slog is wrong. It’s just wrong. The proposal for Vulcan is exactly the same proposal for public benefit requirements that we have in front of the council for adoption. They would meet exactly the same public benefit requirements that we’ve got in front of the council. So, that’s wrong. Wrong wrong wrong. Give me a call back if you want to correct it. I don’t expect you will. But in a vain attempt for accuracy, I’m calling you. Bye.”

So, I called him back. I left a message. He never called back.

I also called several other people at City Council.

They report that the deal Vulcan’s getting in South Lake Union is, in fact, different than the deal they’d get if they played by the rules spelled out in the public benefits legislation that’s before council.

One person I talked to, for example, is Council Member Richard Conlin, who’s seen both the pending Vulcan deal and the pending legislation. He just told me this: “Vulcan’s getting a deal.They would do better than they would do under the incentive zoning proposal that’s in front of council.”

According to several other council offices and legislative staffers, Vulcan is getting to build at least one story higher than code—for free. And maybe two depending on whether or not you think building to green standards (something Vulcan does anyway) should count.

Given that Vulcan is required to kick in about $5 million for two other extra stories, it means the city is potentially giving Vulcan a $5 million present on the two stories they’re getting for free. Worse: The City potentially stands to lose about $5 million in affordable housing funds.

So, when Ceis says: Vulcan “would meet exactly the same public benefit requirements that we’ve got in front of the council” is he saying the public benefits legislation the Mayor sent to council allows developers to get up to two floors for free? If so, that would be some seriously uninspiring legislation.

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The constant braying is getting crazy - those thousands of Amazon jobs, close in and the tax base of a billion dollars of new buildings far outweigh any quibbles.

Josh, screw in the brain, change is happening, money makes it all happen, and the jobs are just where they need to be, close in and in Seattle for decades.

Try to see the forest.

Amazon and Allen will drive a hard bargain of some sort, but, they have a lot to bargain with. And as the time line shrinks the negotiations will get sharper.

You want these folks go to Bellevue or Lynwood?

Posted by Leyland | November 30, 2007 7:41 AM

LeyLand beat me to it.

If the jobs are here we cut down on our emissions, concentrate employment, raise property values near the offices, and reduce commuting to the east side and on and on. Allen fucked us on the stadium and I'm frankly still pissed about horror show at the foot of the Space Needle, but this Amazon thing is good for everyone, whether it comes with a big fat social services handout or not. Let this project bring the revenue, the city can build its own low income housing.

Posted by Judah | November 30, 2007 8:42 AM

nobody gave a shit yesterday either. bigger fish to fry as they say. South Lake Union is a disaster and whatever it looks like 10 years from now will be much better than it's been for the past 10 years.

Posted by crucial information | November 30, 2007 8:52 AM

You guys don't get it.

Every other developer in town plays by the rules. Every other developer in town just signs some tenants and builds the office tower.

Vulcan, on the other hand, thinks that because it owns 60 acres of SLU that it should get to play by different rules. Vulcan whines/begs/lobbies/contributes-to-campaigns to get those rules changed for itself. That's NOT OK.

It's so fucking pathetic that Vulcan can't compete with other developers on a level playing field.

Posted by bah | November 30, 2007 9:02 AM

I'd call their bluff. If Amazon will settle for Microsoft-caliber talent, let them move the east side.

Posted by elenchos | November 30, 2007 9:11 AM

It's even worse than that, IMO, bah.

Vulcan, as the biggest kid on the block (literally!) should be the one setting the example for these types of developments, not trying to weasel out of their obligations under the existing codes.

$5M is pocket change to Mr. Allen; it's nothing. But he seems to have this compulsion, unfortunately all-too-common to the super-rich, to nickel-and-dime his way through these development processes, simply because he has the financial leverage to do so.

It's an abuse of the code, sets a horrible example for other developers, who will inevitably use it as a rationalization for leveraging their own exemptions, and it's just plain wrong to boot (not, of course, that that's ever been much of a motivation for people in his position.)

Unfortunately, the only thing that Mr. Allen seems to respond to in these situations is if it generates large amounts of negative publicity; so keep firing away, Josh. Maybe if enough people raise a big enough stink about it, he'll back off and do the right thing, which is what he should be doing in the first place.

Posted by COMTE | November 30, 2007 9:17 AM

Maybe it's because I haven't dug into this too deep, but are all these jobs used as a huge bargaining chit new jobs or just transferring staff from other locations? If a transfer, where from? Does this result in a net growth of jobs or is it a zero sum game?

Posted by dp | November 30, 2007 9:32 AM

Uh, no, they don't. Every major construction project has at least a couple of exceptions to code. For example, there's a building going in on my block that got a code exception to build right up to the alley line and right up to the sidewalk. They also got code exceptions for windows and greenspace. All projects apply for, and generally receive, code exceptions particular to the lot they're using and local road capacity and so on.

Allen has used his influence to get government favors that have done us a lot of harm in the past. That fucking stadium being the prime example. But this Amazon thing is really good for us. It advances every agenda Seattle progressives are supposedly behind and, no, actually, it wouldn't be giving Allen anything other developers don't get. It's just a question of the size of the handout, and Allen happens to be the biggest mooch on the block.

Posted by Judah | November 30, 2007 9:39 AM


Basically a consolidation from three other downtown locations to a single campus?

Nice for Vulcan and the SLU area, but this handout to them could also be argued to be at the expense of the other to be vacant offices.

Zero sum game....and where does this translate into job growth for Seattle?

Posted by dp | November 30, 2007 9:50 AM

So what.

Posted by crazycatguy | November 30, 2007 10:27 AM

don't forget the ridiculous Disney Vulcan Enterprise head Full of Shit Eyes good for seattle bullshit soccer team that's coming to fill the stupid stadium with consumers!

um, there's some cool soccer being played like all over the city, (Miller Park is my fave to spectate) oh, who gives a shit about that, let's go drink at Pyramid, pay for parking, go to our assigned seat, and jackoff to the sound of ommmmmmmmmmmm ommmmmmmmmmm allen ommmmmmmmmmm ommmmmmmmmmm disney ommmmmmmmmmmmmm ommmmmmmm allentown, cuntsville, USA

Posted by June Bee | November 30, 2007 10:28 AM

the revenue in washington state is paid for by sales tax and property tax. not income tax. job growth isn't the path to higher state revenue, higher property values and more sales are.

Posted by Bellevue Ave | November 30, 2007 10:40 AM

if it's getting to too expensive to run a business in seattle (shades of it being too expensive to, let's say, live in seattle), then the prices will eventually come down. subsidizing does not help this process.

Posted by infrequent | November 30, 2007 11:04 AM


soooo, wouldn't you want people around with money to spend on sales?

especially located in a place like slu and downtown where they can just walk out of their office and spend money?

trickle down effect anyone? people make money, people spend money?

Posted by Cale | November 30, 2007 11:06 AM


Okay. And... where do higher property values and more sales come from? Say it with me, people: "job growth." Why are property values in Detroit so low? No fucking jobs. Why are they so high in New York? Lots of fucking jobs. Unless you're running a retirement community, regional job growth is the base of the property/sales revenue pyramid.

Local governments get their revenue from the same streams, so brining more jobs into Seattle -- rather then letting them go to the East Side -- means increasing Seattle's tax revenues. And increasing Seattle's tax revenues means we can someday aspire to not having to barter with Pierce and Snohomish counties -- much less the state legislature, which hates us -- to pay for a fucking light rail line.

Posted by Judah | November 30, 2007 11:10 AM

Tax giveaways are just robbing peter to pay paul. You have to either tax somebody else to make up for the loss, or you go without the services that you were going to spend the taxes on. Either of those two things makes your city less of a city and more of a suburb. And then you lose to the suburbs. I use the term tax loosely -- this $5M is basically a tax to provide housing services.

Better to stand your ground and make employers like Amazon and robbers like Vulcan realize that if they want to be a part of what makes this a city, they have to pay. If they think they can do better with less out in the burbs, let them try.

Posted by elenchos | November 30, 2007 11:22 AM

Well said Elenchos.

Now, are you going to the moto show at Qwest field tonight?

I heard Rossi is killing it on Bridgestones.

Posted by rubyred | November 30, 2007 11:34 AM

I must be missing something here.

The Vulcan project is asking for a code variance to build higher than allowed and in exchange, they have offered to pay benefits to the city for housing, etc. The issue seems to be that the amount they are offering to provide in benefits is less than proposed in an ordinance not yet passed by the city council. So who is Vulcan robbing from? They're not asking for a subsidy or benefit, they are proposing to give the city millions of bucks.

You think they should be held to a law that hasn't passed yet? Don't know about some of you, but I generally stick with the real, not the hypothetical, codes. If the council wants them to pay more, pass the damn ordinance now.

Posted by elrider | November 30, 2007 11:42 AM

@16, you are WRONG WRONG WRONG (for all practical purposes in this modern age).

There are existing limits to building heights. These were put in place a long, long time ago. Any "price" for those limits was paid a long, long time ago. (Instead of thinking of it as a price, think of it as the City "banking" some land value. Land value that the City controls by virtue of its being, well, the governing authority over this land.)

Increasing those building heights is a DIRECT benefit to Vulcan's bottom line.* (The City is spending some of its banked land value.)

All the City is asking for is to recapture a PORTION of that benefit! (The City would like to use some of the land value that it has spent to benefit low-income households.)

*I can assure you that 2 floors is contributing some amount greater than $5m to Vulcan's bottom line. I know this because I work in development.

I will grant that if we really want to get to the root of this problem, however, we'll need to address the ever-growing wealth disparity in the region and county. The fastest way to do that is to straight to a simple, progressive income tax structure.

@8 That's disingenuous. Give me an effing break. There's a big difference between minor design variation and adding to floor space via additional floors. Floors that are not currently available to other developers.

Vulcan should play by the same rules as every other developer! What is so fucking difficult to understand there?

@6, Yes!
(Comte is right. It's really worse than I said.)

Posted by bah! | November 30, 2007 11:57 AM


Probably go tomorrow.

Rossi needs to decide what he wants to do with his life. Does he want to win for Yamaha in 2008? Or look ahead to Ducati in 2009? Or does he want to go drive cars instead? Or does he want to be Governor of Washington? He can do any of these things, but not all of them at once. It's time to focus.

I figured out where the frito pie place is in Georgetown: Smarty Pants. I'm going to start going there on Wednesdays to watch the races.

Posted by elenchos | November 30, 2007 12:06 PM


"The Vulcan project is asking for a code variance to build higher than allowed and in exchange, they have offered to pay benefits to the city for housing, etc. The issue seems to be that the amount they are offering to provide in benefits is less than proposed in an ordinance not yet passed by the city council. So who is Vulcan robbing from?"

Vulcan is robbing from the City, which is NOT planning to raise building heights UNTIL they have figured out the amount to charge for those new building heights.

The code variance Vulcan is asking for is to get those additional floors BEFORE the City upzones SLU so that they can pay an arbitrary amount that is OK with the Mayor and City Council, INSTEAD of paying the amount that the City Council will charge once they upzone the entire SLU area. There is no doubt that Vulcan wants the code variance for this project BEFORE the area gets upzoned, because that upzone will require them to pay more.

Why the fuck do I know all this? Because I'm fucking paid to figure this shit out. All day, everyday. I'm in the biz. Why am I so pissed? Because the more I think about this shit Vulcan is pulling off, the more it fucking pisses me off!

Posted by bah!! | November 30, 2007 12:07 PM

Well yeah, where you been Wednesdays?

But lately in the off season it is a lot of dirt bike, flat track, and motard. Tim has all the gp and superbike on disc - you can probably request any race you want to see.

And you will grow to despise the elfin car insurance commercials. Despise them.

Posted by rubyred | November 30, 2007 12:11 PM

Let me clarify that the "arbitrary amount that is OK with the Mayor and City Council" would very likely be similar to what downtown developers pay today (at least that is what Vulan is hoping for). However, that amount is going to go higher when the City starts upzoning all over, which it's hoping to do soon. (They are going to be upzoning Dravus, SLU, and the International Distrit.)

Posted by bah! | November 30, 2007 12:11 PM

@ #3 "nobody gave a shit yesterday either"

I just checked back in. There's plenty of comments here. I'm glad I re-posted it this morning.

Posted by Josh Feit | November 30, 2007 1:13 PM
@8 That's disingenuous. Give me an effing break. There's a big difference between minor design variation and adding to floor space via additional floors.

Yes: it's a difference of magnitude. The developers building on my block are building a small project, and they're stealing a little bit of extra square footage from the city. The city is letting them, because it pays off in in other ways.

Vulcan is building a large project, so they're asking for a large variance. It's not that complicated, it does happen all the time to one degree or another, and your use of lots of bold type and exclamation points doesn't change that! You being "in the biz" doesn't mean you know what the fuck you're talking about or -- and this is really the rub -- that you know what our city's spending priorities should be. Putting Amazon in SLU will be an advantage not just four our immediate economic plan, but for many of Seattle's long-term planning goals around density and walkability and all that. Vulcan's not asking to dump toxic waste into the lake, they're asking to add another floor to a building on land they already own. The fact that the extra space will be worth more to them is not really our concern, so much as that it will be worth more to Amazon. If you can explain to me why the extra floors actually place the city under some kind of additional load, I might take you seriously. But you're not doing that. You're acting like a spas and trying to beat us into submission with the bold tag.

Posted by Judah | November 30, 2007 1:25 PM

Lots of bold up in this thread!!

Posted by Lake | November 30, 2007 1:27 PM

i agree, judah, that this would appear to offer some benefit. but then you have to start trying to define where that benefit line is drawn -- held hostage (so to speak) as we were by boeing until they finally found a better deal elsewhere.

i'd prefer not to give these big incentives. but i can see how the jobs are helpful. the problem is, this gives us less control over the continuing rise in prices, for businesses or residences.

Posted by infrequent | November 30, 2007 1:45 PM
but then you have to start trying to define where that benefit line is drawn -- held hostage (so to speak) as we were by boeing until they finally found a better deal elsewhere.

That's true. I draw the benefit line right about here. And I would distinguish between this plan and Boeing's general corporate welfare shtick in the following ways: Vulcan/Amazon is talking about creating an employment hub smack in the middle of the city, where there is high-end housing and a rail transit system being built -- unlike Boeing which started out in the relatively sparsely populated south valley and placed their manufacturing facilities well outside the central city, in places like Everett and Renton. Creating an employment hub in SLU will anchor the housing and businesses that are there now. A lot of those condos aren't even occupied. They're owned by investors who are waiting to flip them. And have you been to that Whole Foods? It's practically deserted. The redevelopment of South Lake Union is not guaranteed -- it could still reverse, and that will hurt a lot of people. Letting Amazon settle down there will encourage resident-owned housing and retail businesses, which isn't just important because of the business, but because of what it means. If Amazon goes in there and we don't get the secondary benefits we're hoping for, we're out the $5m and we don't have to give them anything else. But if the payoffs come through, it's a good investment. That's a judgment call, not a principle -- but all these projects are judgment calls of one sort or another.

Posted by Judah | November 30, 2007 2:42 PM

Who gets hurt if a bunch of overheated speculative development in SLU comes to pass? Paul Allen and Hallivulcan?

Cry me a river.

Bah! has this exactly right - doubly so when you consider how much the City has already subsidized Paul Allen's development schemes so far and how much more they intend to in the future.

Oh yeah, and the sky was gonna fall if Joel Horn and his cronies didn't get to build two massive new structures at PacMed when Amazon moved there during the Schell Administration, except it didn't.

Posted by Mr. X | November 30, 2007 4:06 PM

Argh - make that "doesn't come to pass" in the first sentence.

Posted by Mr. X | November 30, 2007 4:12 PM

I never said what the City's spending priorities should be.

Anyway, if I had to boil down my objections to one point, it's this: Every other developer in this town would sign the office tenants, then build a tower on a plot zoned for towers. What makes Vulcan so fucking special that it should get to play by different rules that directly benefit its bottom line?

I'm going to bold that until it gets through your skull. I'm spazzing the fuck out because I'm so fucking furious the more I think about this. Originally, I didn't post because Josh said it all. Then we get some yahoos with some comments that get me thinking (and angry). Then I get dumb replies that infuriate me. Then I get all in a tizzy! lol. I'm not like this in person- just over the internet.

Posted by Bah! !!!!11!!1eleven!112 | November 30, 2007 7:58 PM

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