City ponders policy for private development on public land

As Federal Way considers building a Performing Arts and Conference Center (PACC) and a possible mixed residential/commercial project in the downtown core, concerns have been raised about private development on public property.

The Parks and Recreation, Human Services and Public Safety Committee heard a brief report Oct. 8 on the city’s need to develop a written policy for private development on city-owned land. Both of the aforementioned projects have private developers heavily involved, which seems to be spurring the city’s desire to establish the policy.

City attorney Pat Richardson had written a memo that touched on some of the concerns regarding private development on city property. Those concerns ranged from federal regulations, city zoning requirements, the type of groups the city would be entering into an agreement with, and the possibility of a project having to be abandoned by the private developer.

Assistant city attorney Amy Jo Pearsall said one viable option is to establish a policy with standards and use those standards to review projects as they come.

“It really depends on the project,” Pearsall said. “It’s hard to know what all the issues are, until we have (a project) in front of you.”

Pearsall noted that even if the city’s involvement is strictly limited to simply being the property owner, that still creates a raft of potential complications for the city.

“If anything happens, we’re an obvious target as far as a lawsuit or a claim,” she said.

Councilmember and committee chair Susan Honda wanted to explore the potential liability and insurance (L&I) implications of the new policy, especially as it pertains to volunteer labor on any future project.

“(If) volunteers…participate in the construction of the development, if it’s in the contract that we would not be responsible for (construction), is that legal? If a volunteer was injured?” Honda asked.

Pearsall said it depends on how the individual agreement between the city and the volunteer’s organization was structured. In some instances, Pearsall said, the L&I responsibility would fall on the volunteer organization, while in other cases, the city could be responsible.

“So it’s really how you structure the relationship. You couldn’t just address that one issue in the agreement, it’s really the big picture of how the relationship is structured,” Pearsall concluded.

Council and committee member Kelly Maloney asked Pearsall about the possibility of a project being started by a private developer and then having to shutdown due to the developer becoming insolvent or some other unforeseen circumstance.

“Is there something we can do to protect the city from ongoing operations costs?” she asked.

“That is one of the major issues here, and you can do your best, but in the end, you’re potentially left with a half-done project on city property,” Pearsall replied. “We would still be left with having to do something. Whether that means buttoning it up, or finishing it ourselves, it would depend on the circumstances. There’s not much you can do…the reality of it is, you’re going to be left with that expense.”

Maloney also floated the idea of having part of the policy require regular check-ins with the full city council, especially if it’s a project of substantial size. Council and committee member Jeanne Burbidge agreed with the idea.

“It makes sense to me to have those check-in points for the more significant parts,” Burbidge said.

The committee directed staff to more fully flesh out the new policy, and report back to the committee during its meeting next month. If approved at the committee level, the new policy would be forwarded to the full city council for approval.

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