Sound Transit and city seek deal for parking garage

City-owned easement stands in the way of construction.

As most city residents know by now, Sound Transit plans to build another parking garage in Auburn, this one on the former Mel’s Lumber site just northwest of City Hall.

But there’s been a problem standing in the way of construction — a city-owned easement overlay on the parking lot. It’s a legal instrument that allows city employees who work at 1 Professional Plaza a block east to park at the site.

On Jan. 4, 2024, the Auburn City Council approved an agreement on how to proceed with the negotiations between the parties to reach a final resolution. Per the terms of the agreement, which requires a final resolution, the city is working with Sound Transit in a several step process, up to and including binding arbitration.

“It is the city’s understanding that Sound Transit is proceeding with their project per their schedule,” said Auburn Public Works Director Ingrid Gaub, adding that Sound Transit will be taking possession of the property in the near future to begin the garage project.

During project development and environmental approval, Sound Transit and the city of Auburn had considered that the city-owned parking would henceforth be accommodated in the new parking garage, as documented in a letter of concurrence dating to February 2020.

But the complexity of accommodating Auburn’s third-party easement interest within this federally-funded transit garage caused Sound Transit and Auburn to reconsider — and agree on a purchase approach for the parking easement after consultation with the Federal Transit Authority.

“Negotiations are ongoing per the terms of the agreement,” said Gaub in an email last Friday.

Making it happen turned out to be more complicated than anyone had anticipated.

In November 2008, voters in King and Pierce counties approved access improvements to the Puyallup, Sumner, Kent and Auburn Sounder Stations as part of the Sound Transit 2 (ST2) ballot measure to expand mass transit throughout the region.

Given that approval, Sound Transit completed a Sounder Station Access Study to identify potential access improvements at various sites. Auburn’s project was to include a parking garage with up to 675 stalls and other amenities enhancing traffic calming and pedestrian and bicycle safety.

In August 2021, Sound Transit named the Sumner, Kent and Auburn projects as Tier 1 projects ready to proceed to construction. On Jan. 26, 2023, Sound Transit combined the Auburn project with those in Kent and Sumner as part of a project baseline.

As stated above, during project development and environmental approval, Sound Transit and the city of Auburn considered that the city-owned parking would be accommodated in the new parking garage.

On Oct. 20, 2023, Sound Transit’s board authorized King County Executive Dow Constantine to execute an intergovernmental agreement with the City of Auburn concerning the agency’s acquisition of certain city-owned “parking easement rights” on the old Mel’s Lumber site.

After consultation with the Federal Transit Authority, however, the complexity of accommodating Auburn’s third-party easement interest within a federally-funded transit facility caused Sound Transit and Auburn to reconsider and agree on a purchase approach for the parking easement rights.

Sound Transit made the city an offer to “extinguish the easement interest,” based upon an independent appraisal it commissioned in August 2022. The city reviewed the appraisal in May 2023, but strongly disagreed with the valuation and conclusion. The city then proposed a structured path to purchase, sale and valuation in late July 2023, and commissioned its own independent appraisal.

The resulting agreement provided a process for the parties to negotiate and mediate a final value for the parking easement rights — and, if negotiation and mediation fizzled, provided for the valuation of the rights to be established through binding arbitration. Specifically, the major terms of the agreement are as follows:

Sound Transit would place its initial offer for the easement interest into escrow; and

Upon receipt of the city’s full appraisal report, the parties would negotiate, then mediate if necessary, to come to agreement on valuation; and

If mediation proved unsuccessful, the parties would then enter into binding arbitration, with an arbitrator with significant experience presiding over real property valuation disputes; and

If arbitration did not take place by a date certain, the city would grant possession and use of the easement interest in exchange for disbursement to the city of ST’s initial offer; and

Upon relinquishment of the city’s easement interest, either via possession and use, or a final agreement or arbitration award, Sound Transit would accommodate the city’s parking needs in the existing Auburn parking garage, with an initial term of three years to be free of charge, and two additional, one-year extensions during which time the city would pay its proportionate share of operating costs; and last:

Mirroring the state condemnation statute, Sound Transit was to make a final offer to the city 30 days before arbitration, and if the arbitration award was 10% or more higher than that final offer, Sound Transit would pay the city’s reasonable attorneys’ fees.

The agreement established a timeline to allow for the project to advance, providing for a date certain — April 30, 2024 — by which the city would relocate its parking from the project site and give Sound Transit possession and use of the parking rights in the event arbitration was delayed.