“Mercer Megablock” announcement coming in next two weeks (updated)

Remember the “Mercer Megablock” — the 96,000 square foot chunk of city-owned property in South Lake Union that the city is trying to sell, and became controversial last October when community and housing advocates pushed for the city to use the entire property for affordable housing?

This morning, Mayor Durkan let it be known that an announcement related to the sale of the property is coming next week, and gave some high-level details on what she will propose to do with the proceeds from the sale. UPDATE: A spokesperson from the Mayor now says that the details on the sale and an accompanying bill for the Council’s consideration will be coming “in the next two weeks.”

The pre-announcement came at the tail end of a stump speech the Mayor delivered this morning that focused mostly on her housing-related achievements since taking office.

Here’s my article from last October with background on the project. Last July the city issued an RFP for bids to purchase and redevelop the property, as approved by the Council in December 2017 and reaffirmed in June 2018. The city received six bids on the Megablock and has been quietly negotiating a deal since the RFP period closed.

Durkan said today that her forthcoming proposal will direct the funds to four efforts:

  • Creating affordable and mixed-use housing in South Lake Union. Durkan didn’t say whether this would happen as part of the Mercer Megablock development, or on other sites.
  • Creating a program where the city can buy property and create affordable housing opportunities. She touted Othello Square as the model that she wants to do more of in Seattle.
  • Low-interest loans to help low-income homeowners build ADUs. “They can’t just be a tool for wealthy residents,” she said.
  • Using some of the funds to invest in affordable ownership opportunities. “We know it works,” Durkan said, asserting that it is “a must” in neighborhoods seeing high levels of gentrification.

As of last October, the city believed that the sale of the Megablock property could generate as much as $65 million. However, a good chunk of that is spoken for:  in 2015 the city loaned itself $26,300,000 for the Mercer West project, committing to repay it with proceeds from the Megablock sale. And in the fall of 2017 when the original $25 million “head tax” failed to pass the Council as part of the budget, the Council borrowed another $4.3 million from the Megablock sale proceeds to patch the budget hole.

The Council’s resolution approving the sale makes clear that after repaying the loans, the remainder of the proceeds should be spent on affordable housing. In addition to the sale proceeds, the RFP sets the expectation that at least 150 units of affordable housing.

More soon.