City hall project backed despite higher price

SHORELINE — When it comes to public projects, the lowest bidder usually — but not always — comes out on top.

In the case of Shoreline’s new city hall project, it’s common knowledge that the recently purchased Highland properties are more expensive than the previously considered Echo Lake site.

Regardless of price, Council members are nearly unanimous in their support of the purchase.

“It is more expensive,” said city manager Bob Olander about the Highland properties, “but regardless of the difference in price, we were never able to come to an agreement with the owner of Echo Lake.”

More than a year ago, Council members opted not to build a new city hall on the south end of Echo Lake when total cost estimates rose above $21.4 million.

On June 26, the Council approved buying two properties adjacent to the current City Hall for a new civic center, with an estimated price of $24.75 million that includes the cost of the primary site and construction of a new city hall. Buying a second parcel adds another $3.3 million for a total projected cost of $28.05 million.

The Council’s unanimous vote to halt the Echo Lake purchase came after an extended 135-day due-diligence period on the site at 19250 Aurora Ave. N. Reasoning was attributed to difficulty in negotiating a development agreement as well as price estimates that were considered over budget.

The Echo Lake site was estimated at $57 per square foot for a total land acquisition price of $3 million for 53,000 square feet, Olander said. Required structured parking would’ve cost an additional $2.2 million, he said. At one point, the city offered to buy the entire 8.61-acre site for $23 per square foot, he said, which was not acceptable to the owners.

The average price for the Highland properties is $70 per square foot, Olander said. The property already has some features, such as utilities, street frontages and buildings, that affect the purchase price compared to undeveloped land, he said. City staff is evaluating some structured parking at the Highland sites, but it would not be as expensive as parking at Echo Lake, he said.

The negotiated price for Echo Lake was always $23 per square foot, said Harley O’Neil, who said that the appraised value of the property was much higher and the price offered to the city was “quite a donation.” O’Neil is managing member of Echo Lake Associates LLC and co-owner of the property together with eight people who either live or work in Shoreline.

The group is now in the process of selling the Echo Lake site to Inland Construction Company, a development firm in Spokane. Developers hope to site a new Shoreline/South County YMCA and senior housing on the property, which was formerly a mobile home park. The site contains about 245 feet of waterfront.

“It is unfortunate; they lost an opportunity for the community to have the benefit of the waterfront and a gathering place for the community,” O’Neil said.

The city’s purchase of the Highland properties would only be a good deal if the buildings on the site were retained, O’Neil said. Since they won’t be, he said the city is paying three times what they would have paid for property at Echo Lake.

Olander said the bottom line for the city is that issues pertaining to joint development of the Echo Lake site were never resolved, and some council members also were concerned with environmental impacts on Echo Lake. The Highland sites also allow for future expansion, he said, while the Echo Lake was constrained and it may have been difficult to have adequate space for a future police station.

“The Highland sites that we purchased are in fact the best available sites,” Olander said.

Before the Council backed out of negotiations, O’Neil said much work was undertaken on the Echo Lake site, including a contract rezone. Costs added up, he said, for a permit fee, consultant fees, geotechnical work and architect drawings, which are not reimbursed by the city.

“I am now trying to meet with City Council members to tell them how crummy (the situation) is,” O’Neil said, “I spent all this money.”