Blue Ribbon Panel on proposed PACC presents findings to council

The Federal Way City Council heard the Mayor
The Federal Way City Council heard the Mayor's Blue Ribbon Panel's findings on the proposed Performing Arts and Conference Center during a special May 8 meeting.
— image credit: Photo courtesy of City of Federal Way

The Blue Ribbon Panel (BRP) presented its findings to the Federal Way City Council during a special council meeting on May 8, with the BRP finding that the proposed Performing Arts and Conference Center (PACC) is a feasible project for the city to pursue, although some of the sub-committees created by the BRP to study the issue added some new information to the overall picture of the PACC's feasibility.

"Frankly, this is an opportunity for the council and myself to hear these recommendations, these findings for the first time, and it will be an opportunity for the council to really drill down on these and have some discussion," Mayor Jim Ferrell said during a brief opening statement.

Ferrell's chief of staff, Brian Wilson, explained the mission of the BRP and how the work was divided among it's nine members.

"There were three areas that were under the purview of the panel to make findings and review objective information: The review of construction cost estimates and financing options, (a) review of the operational pro forma, and (a) review of the potential economic and fiscal impacts, of the proposed Performing Arts and Conference Center," Wilson said. "(This) was very focused on objective data, very focused on what is our potential as a community the downtown area."

Wilson reiterated the breaking down of the BRP into three sub-committees studying the three aforementioned areas, and that each sub-committee's work was presented to the BRP as a whole.

The first sub-committee was finance, with BRP member Kathi Ferrari presenting that committee's findings. Ferrari reviewed an already oft referenced "funding sources" chart, which projected potential funds from naming rights to the facility, grant opportunities for the facility and fundraising efforts for the facilities. The chart is broken down into three scenarios, low, medium and high, with her sub-committee focusing on the low-end scenario which would leave the city looking at an approximate $9 million shortfall in funding. Excluding some other options that have been discussed in recent years regarding financing the PACC, Ferrari said that while feasible, the project would likely require additional financing from the city itself.

"The city needs to step up and provide some kind of temporary financing to give certainty to the project and to bride the timing gaps of when people can raise money, contribute to the naming rites, and while the New Market Tax Credits are being pursued," she said. "Based on our conversations with staff, we found that this is feasible. The city can do an inter-fund loan, lend itself money basically from one fund to another…assuming this temporary loan is drawn down gradually and partially repaid as additional funds are raised."

Ferrari continued, saying the previous work done by the city and its consultants appears reasonable.

"We did also review the various projections made by the city and the fundraising consultants they hired, seemed to be reasonable," she said. "We did identify the need for temporary financing by the city is needed to make the project go froward. We also found the term, structure and cost of temporary financing appears to be reasonable."

Scott Brown gave the report on the BRP's reviews of the various pro formas that have been done in recent years regarding the PACC, saying that the work done so far also appeared to be reasonable and something within the city's ability to pull off. These pro formas included one by Nida Tautvydas, the director of McIntyre Hall in Mt. Vernon, one by Joe McIlwain, director of the Edmonds Center for the Arts, and one by Webb Management Services. In looking at all of that information and the various inputs from those named, Brown said the pro formas currently in existence for the PACC appear reasonable.

"Our conclusions are this…A strong, experienced director starting in Year 0 will be critical to the startup and success of the project. A Board of Directors with financial expertise and connections to the community and region will be necessary in order to actively assist in fundraising for the facility and it's programming," he said. "There's enough flexibility for revenues and expenses based on criteria such as pricing, the kinds of events, the number of events, controlling expenses…We felt there's a lot of flexibility where a strong executive director can manage that."

"It's important that positive cash flows from the operation of the city be held for both operational and replacement reserve accounts, as determined by the management. We felt it's important to build up a reserve," he added.

Finally, Dave Berger reported back on the BRP's "Economic/Fiscal Impacts" sub-committee, saying all signs point towards positive numbers if the PACC is constructed. Their subcommittee looked at a study of similar projects in Bellevue, Kirkland and Lynnwood, along with one in Salem, Oregon and one in Fairfield, Iowa.

"In all five cities that the (city's) consultant analyzed, they experienced positive economic and fiscal outcomes," Berger said. "In other words, patron spending and consumer demand increased, and the cities received additional tax revenues following the opening of those centers."

Along with this, Berger's sub-committee conducted interviews with various developers and a commercial real estate broker who have knowledge of Federal Way and its place in the marketplace.

"There were a total of seven experienced local developers," he said. "Our conclusions/findings from those interviews and the written documentation we received…Most of them…expressed the belief that a PACC and adjacent hotel would positively influence development conditions in the surrounding city center area. Most…anticipate the PACC and adjacent hotel would generate additional foot traffic activity that would be a catalyst for further investment in the city center redevelopment."

Berger's sub-committee did recommend the formation, by the city, of an "Economic Development Strategic Direction and Process." calling it "essential" for successful redevelopment of the city's downtown core. It's the BRP's belief that a clearly defined strategy "will serve to attract private reuse of existing buildings and redevelopment of the surrounding City Center over time."

"Given input received from the developers…the Blue Ribbon Panel considers gradual reuse and redevelopment in the City Center are inevitable, yet unpredictable in (their) timing," Berger concluded.

The BRP was composed of nine members of the community, with various areas of expertise in projects such as the proposed PACC. The BRP included Dave Berger, retired city, government and economic development manager; Scott Brown, Director of Operations of Piramco, Inc.; Brian Bullard, Branch Manager, Columbia Bank; Kathi Ferrari, Vice President/Principal Business Banker, Wells Fargo Bank N.A.; Rob Harpster, owner Olympic Aerospace; Steve Lewis, retired president of Weyehaeuser Real Estate Companies; Mildred Olle'e, a retired college administrator; Pam Smith, Director of the Auburn Performing Arts Center; Susan Streifel, CEO of Woodstone Credit Union.

The BRP's full report, along with the shortened versions presented at the May 8 meeting, are available at




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