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Saint Edward Seminary Preliminary Staff Finding on Commerce Study - Requested Action

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Saint Edward Seminary Preliminary Staff Finding on Commerce Study - Requested Action Item E-X: Saint Edward Seminary Preliminary Staff Finding on Commerce Study - Requested Action EXECUTIVE SUMMARY: This item asks the Commission to determine whether there is a viable public or nonprofit use of the Saint Edward Seminary based on criteria established in Engrossed Second Substitute House Bill 2667, passed by the 2016 Washington State Legislature. This item supports the Strategic Plan goal to develop amenities that advance transformation by leveraging partner-funded park development projects. INTRODUCTION: In spring 2016, legislation was signed by the Governor that required actions by the State Parks and Recreation Commission and the Department of Commerce regarding the Saint Edward Seminary. Engrossed Second Substitute House Bill 2667 (ESSHB2667) directed Commerce to conduct an economic viability study and directed the Commission to affirmatively make a determination based on that study and other Commission-criteria on the viability of a public or non-profit use of the Seminary property. As directed in the bill, State Parks staff consulted with Commerce and provided them with existing background data on the Seminary including various historic studies, cost estimates, and proposals that could be incorporated into the study. This agenda item provides State Park staff analysis and recommendations of the following: · Requirements of ESSHB2667 · Background information on the multi-decades search for preservation and re-use of the Saint Edward Seminary property · Interpretation of the Commerce study · Analysis of Public and Non-Profit Options in light of evaluation criteria in ESSHB2667 · Staff recommendations for a Commission finding pursuant to ESSHB2667 Requirements of Engrossed Second Substitute House Bill 2667 ESSHB2667, passed by the 2016 Session of the Washington State Legislature and codified as RCW79A.05.025(2), provides an opportunity for the Commission to enter into a lease of the Seminary grounds of up to 62 years. Commission statutory authority, without this law, permits leases of no greater than 50 years. The law also allows the Commission an affirmative vote of at least five members of seven to enter into a long-term lease with a private developer at Saint Edward State Park, but with an important caveat. The extended lease can only be authorized by the Commission if: … the commission finds that the department of commerce study required by section 3 of this act fails to identify an economically viable public or nonprofit use for the property that is consistent with the state parks and recreation commission’s mission and could proceed on a reasonable timeline. The statute requires that the Commission arrive at a finding before it can enter into a long-term lease with a private entity, which requires review of alternative public or nonprofit uses found in the Commerce study (See Appendix 1). SIGNIFICANT BACKGROUND INFORMATION: 1 Saint Edward State Park, located in the City of Kenmore is 316 acres and includes 3,000 linear feet of freshwater shoreline on Lake Washington. The property is characterized by three major landscape elements including undeveloped second growth forest along the lake, wide-open expanses of lawns and sports fields, and the Seminary, gym, and pool buildings and associated cultural landscape. The park was acquired by the State of Washington from the Archdiocese of Seattle in 1977 for $7,000,000. Since the property acquisition in 1977, the Dining Hall of the Seminary has been continuously used for special events and classes. In earlier years, when the building was in better condition, the upper floors were used for Youth Conservation Corps and staff housing. Since 1977, State Parks has entertained varied preservation, rehabilitation and re-use ideas for the main building and grounds including unexpected opportunities or those borne out of formal channels. At various public forums, the Commission has made explicit its desire to have a public or private entity come forward to help the agency preserve the integrity of the historic structure and district. Numerous public meetings attracting hundreds of participants have generated diverse ideas. Over the years, many proposals were serious enough to filter through the Commission for their consideration. Meanwhile, the main Seminary structure fell into disrepair. While some capital improvements were authorized by the State to ameliorate immediate hazards, State Parks has not been able to find direct state resources to adequately operate and steward the structure. Potential new uses of the building have been explored, but ultimately did not result in a substantial rehabilitation or major preservation project. These historic proposals or studies are listed below to provide context. Past studies and proposals include: · Saint Edward Facility Study (Jones and Jones, 1981) · Saint Edward Seminary Development Study (circa 1985) · McMenamins proposal (2006) · Kidder Mathews proposal (November 2013) · Bastyr University dormitory and classroom proposal (2015) · Daniels Real Estate land exchange proposal park lodge (2016) · Daniels Real Estate lease proposal park lodge (2016) · Department of Commerce Economic Feasibility Study (2016) · Partial demolition of Seminary (2016) · Joel Prichard Library artifact storage (2016) · Model boarding school for homeless youth (2016) · School for visually-impaired youth (2016) The building also received various maintenance and capital improvements over past decades in an effort to keep the dining hall and park staff housing functional. The latest estimates for full restoration and re-use now are in the $40 million range (See Appendix 2). Economic Feasibility Study of Potential Public and Nonprofit Uses The Commerce study provides a framework for the Commission’s response to the requirements of ESSHB2267. Completed July 31, 2016, the study further defines “feasibility” by adding another consideration in their analysis, defined as “viability.” Therefore, the study places a finer point on what it means for a project to show prospects of success by assessing the economic feasibility and viability of potential public and nonprofit development scenarios and concepts. 2 Commerce contracted with the Jonathon Rose Company, which provided technical guidance on public/nonprofit partnerships and created a toolkit to aid in the evaluation of proposals. According to Commerce, the Legislature limited their study to considerations of economic feasibility of potential public and nonprofit uses, and existing cost estimates from previously considered uses. Determining a viable project, however, required Commerce to also understand how to best answer this question: What factors bear on the economic feasibility of proposed public and nonprofit uses of the Seminary building at Saint Edward State Park? (Commerce page 6) Cost estimation and financing are the first of many factors that bear on economic feasibility. Commerce recognized this and designed what it referred to as a “toolkit,” which is explained as a “high-level discussion tool” that incorporates analysis of various proposals in the form of an Excel workbook. The product, or estimate, that is derived from the toolkit reveals the “approximate cost to make the Seminary useable for any development scenario or project proposal” (Commerce Page 5). With this “toolkit”, State Parks has an evaluation instrument that will allow staff and the Commission to more fully communicate the myriad required steps, criteria, and other considerations to the public that indicate whether a project has merit and a chance of success. Determining project viability, however, goes well beyond mere economic feasibility. In this case, feasibility refers to a public or nonprofit proposal’s ability to be financed, while viability refers to a proposal’s ability to move forward considering also: 1. State Parks’ mission 2. Reasonable timeline The most significant aspects of those two additional factors for the Saint Edward Seminary, include a project’s: 1. Consistency with Land Water Conservation Fund (LWCF) 3. Consistency with City of Kenmore zoning 4. Consistency with Commission preservation policies and the Secretary of the Interior’s Standards for the treatment of historic properties. Commerce further explains how its study “does not approve or reject” any given concept or “favor” any development scenario, but rather provides an analytical framework that can be used to assess potential scenarios and citizen concepts in an effort to aid the Commission’s finding. Finally, the conclusion of the analytic section of the study on page 30 provides the Commission with a third-party observation of the facts, which addresses the original question posed by the Legislature: Does the study identify an economically viable public or nonprofit use of the property that is consistent with State Parks’ mission and can proceed on a reasonable timeline? The Commerce study answers that core question thusly: 3 The analytical conclusions of the potential development scenarios and citizen concepts reveal no identified or available specific funding sources for capital investments, and ongoing operating and maintenance costs. Commerce concludes there is no potential viable public or nonprofit project assessed in the study, but also states that another, unspecified proposal could theoretically come forward and meet the established criteria for both feasibility and viability. The Commerce study goes into some depth regarding these various options. Below, we analyze - with Commerce’s toolkit and the law’s criteria - the most realistic
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