Critical nuances of BIA implementation since 2013, driven largely by myriad assessment ceilings, are set to be copied and pasted into another decade of the MID BIA.  Assessment ceilings simultaneously create unequal and inequitable discrepancies between similarly situated Ratepayers (+- $15,000/year).

ASSESSMENT CEILINGS

• 100% of condominiums and co-ops are assessed for office, retail, restaurant and commercial space

• 36% of apartments and hotels are NOT assessed for 1,506,000 net square feet of office, retail, restaurant and commercial space

  • Annual assessment value of unassessed square footage: $362,000.  That's $4,000,000+ for the next decade.

  • Consider AVA Belltown and Olympus apartments, owned by Avalon Bay and Equity Residential, respectively, that combined have a market cap of over $50 billion.  One wonders why they aren't paying for the 20,000sqft of ground floor space at their properties while the 8+ condominiums within two blocks of them are assigned Ratepayer parcels assessed thousands of dollars a year the same situation.

• The average difference between similarly situated Ratepayer parcels paying the Base Assessment vs. the SqFt Ceiling is 28.71%

• Increasing the Residential assessment ceiling disproportionately impacts condominiums, 85% of which are assessed this ceiling  

  1. Only 45% of luxury and market rate apartments pay the residential ceiling

• Only 61% of Hotels pay the Hotel assessment ceiling

• Parcels owned by the University of Washington, including ultra-luxury Rainier Square, that are built and managed by large, for-profit companies, have paid half of the nominal assessment rate for the past decade.  The difference?  Over $260,000/year.

HOW DOES THE CURRENT ASSESSMENT CEILING MODEL WORK?

• RATEPAYERS ARE ASSESSED THE LOWEST OF SEVERAL CEILINGS:  Consider 3 unique 100,000net sqft Apartments:

• Apartment A = 20 units of 5,000sqft each.  Assessed @ Apartment Ceiling of $155/unit.  TOTAL ASSESSMENT = $3,100

• Apartment B = 100 units of 1,000sqft each.  Assessed @ Apartment Ceiling  of $155/unit.  ASSESSMENT = $15,500

• Apartment C = 300 units of 333sqft each.  Assessed @ Base Assessment -OR- SqFt Ceiling.  ASSESSMENT = $21,000 or less

• HOW COULD THIS MODEL BE IMPROVED?  Combine assessed value and square footage to create a uniform valuation methodology eliminating the binary approach to assessing properties based on ONE criteria: Value vs. SqFt vs. Unit Count, etc.

  • WHY?  Does Apartment A with only 20 units benefit 5x to 7x LESS than Apartments B and C with 100 units or 300 units, respectively?

    1. Did you know that Apartment A has a King County assessed value equal to or exceeding assessed values for Apartments B and C?

    2. If it's all about unit count, Apartment A should pay 5x less than Apartment B and 15x less than Apartment C.

    3. Put another way, Apartment C should pay at least $46,500 instead of only $21,000.

       • The current assessment model overwhelmingly benefits larger developments with smaller units / rooms.

PARCELS MATTER

• Condominiums: residential (nonprofit) condominiums and commercial (for profit hotel, office, retail, etc.) condominium parcels are assessed as separate Ratepayers, generating more revenue for the BIA.

• Apartments & Hotels: residential, for-profit apartment parcels and nearly all hotels are assessed as a single Ratepayer with their mixed use hotel, office, restaurant and retail spaces, reducing revenue to the BIA.

  • > 1,500,000 net sqft of commercial, retail and restaurant space in mixed use apartments and hotels reduces MID BIA assessments by $361,000/yr @ $0.24/sqft.

• Open Letter: MID BIA Renewal Questions and Concerns

  1. BIAs are intended to augment and supplement City services, not to replace them

     • MID services primarily provide for cleaning alleys and sidewalks, but also oversee certain City Parks and pay ~$2MM for security services including off-duty SPD overtime up to $150/hr

     • MID services appear to enable complacency from the City of Seattle

       • The MID BIA budget, borne entirely by Ratepayers, is 0.224% of Seattle's $7.14B budget in 2022

     • During the July 14, 2022 MID BIA renewal meeting coordinated by DSA, Jon Scholes responded to a question about the long-standing lack of City services stating that "we can't accept what the City has been providing," yet the MID: 1) is not authorized to campaign for change or lobby elected officials and 2) continues to assume additional levels of responsibility for 'core' services like safety and parks and for what many taxpayers consider essential to operating a built Downtown environment: clean public spaces. 

• 2. Despite the same physical footprint, BIA assessments have increased nearly 300% while inflation has risen 36% since July 1, 2013

     • Assessments grew at an average 7.5% CAGR between 2018 and 2022

     • Draft recommendations for the renewal suggest 15% year-over-year assessment growth to an $18,000,000 budget

       • What business needs justify doubling the annual assessment growth rate?

       • Assessments should be more closely tied to inflation instead of increasing exponentially within the same footprint

     • If you wonder where your assessments will go, look no further: DSA is plugging the Seattle City Council with grand ideas for 3rd Ave. 

       • Tree-lined 30' sidewalks sound lovely, but our City cannot appropriately care for our existing parks and public spaces.  Look no further than Bell Street Park and Regrade Dog Park.

• 3. Ratepayer Advisory Board (RAB) members do not actively communicate with the Ratepayers they are supposed to represent

     • Ratepayers have no opportunity to vote for RAB members who they believe will best represent their interests

     • Over 95% of the 75 Downtown Seattle condominium Ratepayers have never heard directly from their representatives

     • Communication from DSA and the RAB is often reactive and based on a self-service model instead of proactive engagement

• 4. The renewal process is being driven by DSA (the Program Manager) through a closed process 

     • 99% of Ratepayers lack access to all the information driving renewal recommendations

     • BDS Planning was retained by the Downtown Seattle Association (DSA) in similar fashion to the renewal process a decade ago

     • DSA has called the renewal a "re-imagining" process despite a lack of transparency and imagination

       • The proposed services and assessment structure for the next decade is a rinse and repeat of what we already have

       • Ratepayer committee members assigned to assist with the renewal stated there is a "lack of political will" for change

       • See what DSA has to say on their MID Renewal page

• 5. Certain Ratepayers receive special rates

     • Surface lot parking Ratepayers (example) have enjoyed inflation-free assessments during the past decade

     • The Edgewater luxury hotel (232 rooms) has been assessed less than $500/yr despite a stated rate of $80/room ($22,586.73 with inflationary adjustments this assessment year).  Cumulative under-assessment since 2013 = ~$200,000

     • The Thompson Hotel (158 Rooms) and Sequel Apartments (93 Units) are assessed a single rate at the Hotel Ceiling totaling $15,382 in 2022.  

       • The assessment excludes 93 apartment units that would be subject to a 2022 Residential Ceiling rate of $14,147

       • How does this assessment methodology align with the rest of the MID BIA?

         1. Condominium properties that share space with hotels, such as Olive 8, are assessed as separate Ratepayer parcels.

            1. Hyatt at Olive 8: 346 Rooms are Assessed $33,685

            2. Olive 8 Residential: 229 Condominium Units are Assessed $34,835

               1. TOTAL Assessment for 2022 = $68,520

• 6. Some Ratepayers simply don't pay

     • Martin Selig properties owe $2,400,000 in back assessments, penalties and interest

     • Additional Ratepayers owe over $1,350,000 dating back to 2013

     • The City is responsible for collecting / enforcing the Ordinance, but doesn't seem up to the task

• 7. DSA has been unwilling to provide timely access to critically important records related to MID BIA operations

     • DSA refused to fully comply with this record disclosure request (PDR) initiated in December 2021

• 8. DSA has a private interest in renewing the MID

     • DSA has served as the incumbent Program Manager for over two decades

     • Failure to renew the MID would be a massive blow to DSA's influence in Seattle