Council gets briefed on new 23rd Avenue response

This morning, Council member Herbold’s Civil Rights, Utilities, Economic Development and Arts Committee was briefed on how the city is responding to the ongoing mess that is the 23rd Avenue construction project.

Last week, the Council sent a set of questions to SDOT and the Office of Economic Development (OED). In large part, however, they were rendered moot by the Mayor’s announcement yesterday of actions the city will be taking, most notably making a $650,000 business impact mitigation fund available.  So this morning’s session became an opportunity for the Council members present (Herbold, Sawant and O’Brien) to drill into the details of those plans.

The bulk of their questions related to the mitigation fund, which will be managed and disbursed by the OED. That conversation began with a discussion of how the $650,000 figure was arrived upon, in the context of a public comment by a 23rd Avenue business owner who argued that $650,000 won’t be nearly enough to mitigate the impact on local businesses. The city’s hands are largely tied: the Washington state constitution prevents city funds from being given to local businesses. So the EOD looked to federal funds granted to the city that are generally directed to promoting businesses — especially those supporting minorities and low-income communities — and could be flexibly redirected towards mitigation. $400,00 came from a project earmarked for this year that could be deferred to 2017.

The OED is still working through all the details of how the money will be disbursed, but they know the criteria that a business will need to meet to qualify:

  1. The business will need to have 5 employees or less;
  2. The business must serve a low-income community, or have a low-income owner;
  3. The business must demonstrate need: that it has seen a revenue decline due to the construction project.

Mitigation funds can be used for operational expenses (i.e. paying bills) or physical improvements to the business (e.g. new signage). The council members wondered whether it made sense to allow for physical improvements, particularly if the available funds are not likely to be enough, and argued that operational expenses should be the priority. OED responded that for each of the businesses they wanted to be able to look at what the next step is for the business, and for some of them physical improvements might make more sense. Though it was agreed all around that for the vast majority of businesses operational expenses would be their priority for the funds. Herbold wanted to revisit this issue once OED had completed its assessment of the businesses’ needs, and she wanted to review the assessment report.

OED is drafting an “intake form” — basically the 1-2 page application that a business will need to fill in to be eligible for funds. It should be done by the end of the week. Businesses will need to document their eligibility according to the three criteria above, so they should be prepared to show tax returns or other documentation of revenues, as well as the bills they have been accumulating during the project. OED plans to do workshops in the neighborhood, as well as meeting with individual business owners, in order to help them pull everything together.  They estimate that of the 75 businesses in the corridor, in the end 20-25 of them will qualify for mitigation funds.

OED is also reaching out to landlords along the corridor, encouraging them to be lenient on collecting rent until the mitigation funds can get disbursed. Seattle Public Utilities and Seattle City Light are also deferring bill payment, and the city is also deferring payment of its share of the B&O tax.

OED expects to get the fund out “well before the end of March.” In the initial phase, they will likely set a cap on payments in order to be able to help as many businesses as possible. If there are remaining funds and additional needs, they will organize a second phase. The cap on the previous Rainier Valley project was $35,000; the cap for this one may be lower than that but almost certainly won’t be higher.

SDOT director Scott Kubly also gave a review of the project, largely reiterating his comments from yesterday afternoon. He noted that the Phase I delay originated with a design contractor’s mistake on the trolley pole foundation that was discovered in November; the contractor was terminated, but SDOT was forced to decide between two bad choices: extend the end-date of the project by 3-4 months, or have a 3-4 month period of more intense construction (and impact on the community). They chose the latter, but they admit they did a poor job of communicating with the community about the impact it would have. More to the point, they didn’t engage with the community to gather input to inform the decision they were making. They claim to have learned important lessons about working with the DOE and the Department of Neighborhoods about how to have an ongoing conversation (and the right conversation) with impacted communities, even when decisions need to be made quickly.