Process begins to find new developer for Maple Valley Donut Hole
By KRIS HILL
Covington Reporter Assisitant Editor
July 22, 2011 · Updated 7:32 PM
King County has put out a request for qualifications in a renewed effort to move forward on plans for the site, which is bounded by Kent Kangley Road to the north and Southeast 228th Street to the west, to be developed.
This new strategy, which comes after Kirkland-based developer YarrowBay chose not to complete the purchase of the 156-acre property in February, has been part of a process that began in March.
The RFQ was issued by the county on June 16 and responses from developers must be submitted by July 26, according to the RFQ documents.
“This first phase RFQ is intended to identify the most qualified developers based upon responses to the RFQ,” the documents stated. “The top-ranked developers (Finalists) as identified by King County will then be invited to prepare and present formal Request for Proposal (RFP) submittals in response to the second phase of this competitive process.”
Maple Valley will, according to City Manager David Johnston, have a small role in the RFQ review process, but not nearly as much input as city officials would have liked.
“From March through May the city has been talking with the county... about working on a partnership on this now that we have a fresh start,” Johnston said. “They agreed to allow us to be a part of the process to develop the RFQ. The RFQ was issued without our involvement. We found out two weeks after the RFQ was issued that it had been issued. We’re grossly disappointed that those promises weren’t kept by the county.”
Sung Yang, the director of external affairs and governmental relations for King County Executive Dow Constantine, said the RFQ process is in fact the best way to find out if there is a developer that will do what Maple Valley is asking for in the Donut Hole.
“To satisfy any questions the community and the city might have, I think that we actually have opened our process quite a bit...,” Yang said. “We brought in the array of potential kinds of applicants, which was a very significant decision we made to support the city of Maple Valley’s desire... in response to their particular request. We’re very committed to working with the city as we proceed on this issue.”
This is not the first time the city and the county have clashed since the office of former County Executive Ron Sims first began negotiating to get rid of the property more than four years ago.
It’s been quite a long and winding road to get to this point. Eventually the county will sell the land and it will be developed, but, who will buy it and how they will develop it is still up in the air.
A BRIEF HISTORY OF THE DONUT HOLE
When Maple Valley incorporated as a city in 1997 the Donut Hole — which is home to a 13-acre county roads maintenance facility, nine holes of the Elk Run Golf Course, an active gravel mine and undeveloped land — it was designated rural which would allow for one home per five acres. It was also not included within the new city’s boundaries.
King County has owned the Summit Pit property since 1953 and expanded its use over the years to support road maintenance it does under contracts with Maple Valley, Covington and other cities.
Neighborhoods around the donut hole, some of which were built before the city was incorporated and some after, have between six to eight units per acre.
City officials were told, though, the county had no plans of developing or selling the property so there was no need for it to be within Maple Valley’s boundaries.
Things changed a decade later.
Initially the county hoped to swap with YarrowBay for land the developer had an option to purchase near Black Diamond. This was the plan in the summer of 2007. Also part of the plan then was to allow Maple Valley to annex the property after it was developed. Part of the stated driving force by county officials at the time was a desire to relocate its transportation maintenance facility to a spot where it wasn’t surrounded by homes.
The county adopted a “unique circumstances” ordinance, according to information provided by the city of Maple Valley, which allowed the county to negotiate the sale of the property with a private entity rather than offer it up at a public auction.
At this time, the county started the process to change the zoning from rural to urban, which Maple Valley objected to because it was located outside the urban growth boundary and its rural designation had prevented the city from planning for development of the site.
City officials did not object to the land use designation change but the idea Maple Valley was not going to be involved in planning for the development, including what kind of housing would be there, how many units, and other details for the property, which has no residential on it now.
In 2007 Maple Valley asked King County to work together on a joint planning effort for the site.
The county, meanwhile, went through a request for proposal process in early 2008 and eventually YarrowBay’s proposal was selected.
On Oct. 2, 2008, after a number of meetings, strategizing and maneuvering, the county and the city signed a memorandum of agreement that set out the first steps of a joint planning process.
This came after the Growth Management Planning Committee forwarded a recommendation to the County Council that favored bringing Maple Valley to the table.
Allowing the city to annex the property early on as part of a joint planning process is what Maple Valley officials have pushed for even before the negotiations were made public.
In February 2009 the county hammered out a purchase and sale agreement for $51 million for the property with Summit Place 156, LLC, or YarrowBay.
The joint plant was adopted by the Maple Valley City Council and Johnston signed the interlocal agreement on the condition that the County Council adopted the same plan, word for word. It was sent to Kurt Triplett, the interim county executive, in June 2009.
In the summer of 2009 Maple Valley development staff began working with the Planning Commission to develop and adopt pre-annexation zoning for the donut hole.
Later on in the year the city chose to shift the pre-annexation zoning work to the back burner and focused its attention to the subarea plan for the Donut Hole.
In February 2010 the Maple Valley City Council adopted a subarea plan based on recommendations by the Planning Commission.
Meanwhile, YarrowBay asked for a year extension on its purchase and sale agreement closing date.
The Maple Valley Planning Commission forwarded its pre-annexation zoning recommendations to the City Council on Dec. 15, 2010, as the ILA signed by both councils and YarrowBay had a December 2010 goal for completion.
In January and February of this year the City Council held hearings and discussion the zoning recommendations.
King County sent a notice of objection Feb. 7 to the city concerning the preannexation zoning proposal. The county objected to when vesting for the project occurs under the zoning. The other objection involved the county’s belief the city must adopt a transfer of development rights or TDR program in the zoning measure.
On Feb. 17, however, YarrowBay managing partner Brian Ross sent a letter to the County Real Estate Services office terminating the agreement.
YarrowBay’s had proposed a master planned development with more that 1,600 residences along with retail and commercial businesses.
According to the RFQ document, the county hopes to determine if there is interest in the development community in the county’s property as well as if those interested can actually get the project done.
“We weren’t able to consummate our purchase and sale agreement with YarrowBay,” Yang said. “So, at that point the county had to reset in a sense, in seeking a fresh start. At the end of the day, this property is out there.”
In addition, the county’s goals include developing “the Property in a way that will increase long term employment opportunities within the community while staying consistent with the other goals,” increase affordable housing opportunities and to sell the land “to a developer who will be responsive to the concerns of the surrounding city and community.”
And, of course, get the most money for the land as it possibly can “while staying consistent with the other goals,” the RFQ documents state.
Going back to the concept of “affordable housing,” the RFQ stated at least 30 percent of the residential portion of the development must fit within the definition of affordable housing, both made available for purchase or for rent.
A minimum of 10 percent of the housing units will have to be rented to households that earn between 50 percent and 60 percent of the annual median income defined by HUD for King County as of the time the units are rented, the documents state.
The remaining residential units that must fall into the “affordable housing” category to round out the 30 percent can be a mix of ownership or rental subject to conditions.
Each developer submittal in response to the RFQ will be evaluated by a committee.
After a meeting earlier this month with county officials, Johnston said, he did get at least one apparent moral victory.
“The only thing we walked away with from that (meeting) is they will allow us to have a representative on the evaluation committee, but, only in an advisory role,” Johnston said.
Yang noted the county changed its process to accommodate the requests of the city.
“From my estimation the county and both the community out there has a strong interest in putting it in the hands of someone who will develop it into a more attractive use,” Yang said. “One of the things they asked for is if we might look at a broader array of outcomes or uses than what was previously planned for. They wanted to at least see if there was the option for greater economic activity and possibly a job center.”
As a result, the county chose to put out an RFQ, Yang said, which is more flexible and allows for a broader spectrum of applicants rather than put out an RFP to look for a specific kind of proposal from potential developers.
In the meantime, Johnston said, the city has essentially completed the pre-annexation zoning process with the exception of a final approval by the council. Now it’s just a matter of when is the best time to bring it back to Maple Valley’s elected officials.
From a long term planning perspective, Johnston said, there are things the city would like to see happen in the Donut Hole.
A pair of surveys done in recent years for the city demonstrated that Maple Valley is a bedroom community, home primarily to professionals who commute to the Eastside, Seattle and the Kent Valley for work, and as a result there aren’t a whole lot of people here during the day.
And until there is a daytime population, Johnston noted, you can’t bring in other services.
“So, we have to create living wage jobs,” the city manager said. “The question is: what type of living wage jobs? We have to look at state and regional economic job creation policies that already exist.”
At both those levels there is a push, Johnston explained, to attract high tech, biomedical, energy industry jobs, just as a few examples.
“I think we’re very well suited to attract that type of investment because of the demographic profile of the community,” he said. “We have one of the highest median income in the metro area. We have affordable housing even though the values have decreased. We have a great school system for families. Our adult population is one of the highest educated in the county... as of 2008, 41 percent of our population had a bachelor’s degree or more.”
And more than half of those well educated adults work outside the city with the average commute about 30 miles one way.
So, the Donut Hole, as the city sees it, could be a great place for economic development which is an area that has been a focus of Johnston’s since he arrived in the city in the spring of 2009.
Johnston said the city would like to see a market feasibility study done for the county-owned property that sits “smack dab in the middle of the city of Maple Valley.”
The county is committed, Yang said, to work with Maple Valley and the next step of the RFQ process will allow all involved to see what the options are for the Donut Hole.
Once the RFQ has closed on July 26, the evaluation committee will be put together.
“That’s not common but, we feel in this case it’s warranted based upon the desire to partner with the city,” Yang said. “After that it will be up to the group to see if there are viable proposals. If there are viable proposals then that might refine a subsequent RFP that is then issued or there is the option that’s preserved of negotiating directly with one of the proposals.”
This RFQ process will test “if the current economic and market conditions will allow for a kind of development that’s envisioned there in terms of financing, etc.,” Yang said.
Contact Covington Reporter Assisitant Editor Kris Hill at firstname.lastname@example.org or (425) 432-1209, ext. 5054.