As the projected start date for construction of the apartment complexes and businesses that will populate the area surrounding the Capitol Hill light rail station approaches in coming years, Sound Transit has released clarifications of many of the rules governing how the short-list of potential developers will outline project proposals for the developments. According to Cathy Hillenbrand of the Capitol Hill Champion community group, Sound Transit has provided new information about how the proposals will be graded and selected as well as aspects of the design process.
“What I’ve been hearing is that the developers will be having to spend a couple hundred thousand dollars if not more just to complete these proposals just because of the level of design-detail Sound Transit wants,” said Hillenbrand. “So if you’re one of the six teams competing for Site A, that’s not a great percentage of chance for winning, so are you going to lay out hundreds of thousands of dollars for that?”
The questions and concerns raised by the developers have ranged from the amount of detail requested in the proposals themselves before selection is made, whether the completed projects will be sold to businesses or leased, and the cost of developing the sites themselves. CHS reported on an August meeting between Sound Transit and the short-listed firms as developers asked for clarifications on the high price being asked for some of the parcels involved in the potential deals.
The primary concern for cost of construction has been directed at Site A, the largest and most expensive site, which will require developers to design, build, and maintain a large plaza. When the Request for Proposals was first issued, Sound Transit had listed the cost for developing Site A and the plaza at $404 per square foot.
“Originally, [Sound Transit] said that the $404 a square foot that they’d be paying would apply to the plaza and the buildable square footage, but now they’re saying that it doesn’t apply for the plaza,” said Hillenbrand. “The question that people are asking is that, since its top-market dollar for property, and while you can build something on Capitol Hill for that amount elsewhere, you won’t be expected to build a plaza for it and maintain it. Sound Transit has been saying ‘well, you get this great amenity,’ but that’s still one of the big questions about cost that developers for that site are dealing with.”
Outside of Site A, developers have also said that Sound Transit’s request for business plans for both leasing and selling the lots is making the process of compiling the proposals more difficult and potentially more costly for developers as well.
In order to streamline the process, developers are able to allowed plans for multiple sites in one proposal. But according to Hillenbrand, despite Sound Transit officials saying they want competition for the proposals, developers only proposing for a single part of the project could be forced to drop out due to the high cost of the pre-selection design.
“The master developers bidding for multiple properties are confused about how Sound Transit is going to evaluate multi-site proposals,” Hillenbrand said. “They’re going out of their way not to advantage the master developers, but at the same time they short-listed four of them. They’re doing these sort-of contradictory things, and I don’t know how that’s going to play out. The sad thing is it’s taking a lot of creativity away because you’re not going to get the best ideas about what could happen with interaction between the sites.”
Hillenbrand said the Capitol Hill Champion had asked Sound Transit to instead choose a single master developer for all sites.
The rule clarifications also emphasized that developers must closely adhere to those designs once development begins. If any redesigns occur after the city’s design review is completed, Sound Transit may then disqualify that development team and choose the runner-up. Hillenbrand said that Sound Transit’s demand for detailed architectural plans upfront and their right to disqualify has made developers wary about dedicating the funds necessary to complete the proposals at all.
“There’s a concern about the level of detail in design they’re asking for,” Hillenbrand said. “The way they’ve written the RFP, they want decisions made now that you would usually decide later in the process. That’s a lot of design time and money by the team, and then they still have to go through the city’s design review process.”
The deadline for proposals for the Sound Transit-owned properties has been pushed back to November. You can learn more at capitolhillchampion.org.
UPDATE 9/10/14: Sound Transit has issued a second clarification document (PDF). We haven’t gone through it in detail yet so holler if you see something notable.