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Kirkland City Council unanimously approves purchase of Eastside Rail Corridor for $5 million
The Kirkland City Council held a special meeting Monday to discuss many end-of-year issues, but the biggest decision could have an impact on the city for decades.
In a unanimous vote, council members authorized the purchase of the Eastside Rail Corridor from the Port of Seattle. The 5.5 mile segment of the rail line goes through the heart of three major Kirkland business districts and was formerly owned by Burlington Northern Santa Fe (BNSF).
"This is a very, very big moment," said Kirkland Mayor Joan McBride, following the vote.
The council authorized the purchase, which was negotiated by the city and the Port of Seattle for $5 million. The corridor could be redeveloped for multiple uses, including a bike and pedestrian trail.
But the issue of how to ultimately pay for the project was of great concern during a study session prior to the vote.
“Do you want a trail for Christmas, of course I want a trail for Christmas,” said Councilman Dave Asher. “Well, do you want to pay for it in January, February or March or for the next several years? This is something we have to look at closer.”
The line runs from 108th Avenue N.E. at the south near 520 and up to the northeast part of the Totem Lake neighborhood near Slater Avenue N.E. at 132nd Place N.E.
With approval from the Port of Seattle Commissioners, city staff now has 60 days to perform a “due diligence” review of the sale agreement. The “due diligence” period is the time during which the city can review and evaluate easements, leases and other encumbrances against the property.
Staff will present the council on or before Feb. 12 with an informational report on the transaction. The sale is projected to close on March 15, 2012.
Initial purchase of the Kirkland Segment would be conducted through an inter-fund loan and would not require the expenditures of the city's general fund. As a part of the inter-fund loan, the city would borrow the money on a maximum term of three years.
“In these times right now we need something to look forward to and this is one of those things,” said Councilman Bob Sternoff during the study session.
One possibility is that the city could get help from state or federal grants - thanks to tolling on 520 and possibly 405 - to help with overflow issues from those projects, among other possible financing opportunities, said City of Kirkland Director of Finance and Administration Tracey Dunlap.
“I am really concerned about how close we are to the edge,” said Asher, during the study session. “I am really eager to make this work … but the stress in the financing is the real concern.”
The city also has some major financial issues that could potentially make the financing of the project difficult.
City officials are facing the potential for less state sales tax funds for annexation, the $15 million agreement reached to potentially redevelop Totem Lake Malls and a $17.3 million new public safety building in the Totem Lake neighborhood - three major projects that could have an impact on available funds for the project.
Development of the Kirkland Segment of the corridor is envisioned to include things like a possible pedestrian walkway, bike path and a Sound Transit light-rail line.
The branch of the line that connects with the Kirkland corridor runs south from Renton up into Snohomish County at the north end.
But there are some outstanding issues with the rail corridor. One of the potential issues is that an easement is to be reviewed that was brokered with Puget Sound Energy (PSE) by King County.
The utility easement allows PSE to utilize the corridor for gas and electrical transmission and distribution. There are some concerns about the scope of PSE’s rights under the utility easement.
King County is currently negotiating with PSE with respect to clarifying some of the easement language and eliminating potential uncertainty with respect to the scope of the utility easement.
As the city moves forward with acquiring the Kirkland Segment, it will work with the county and PSE on making appropriate clarifications to the utility easement language.
Another issue is that the corridor is "railbanked." The purpose of "railbanking" is to preserve rail transportation corridors for future reactivation of rail service and to allow interim public uses such as transportation and recreational trails.
One critical issue with respect to "railbanked" property is that it is subject to reactivation for freight rail use. This means that if the federal the federal Surface Transportation Board receives a viable request from a freight rail operator, the corridor could be reactivated for freight use. The key issue becomes the definition of a “viable” request.
In this case, however, King County holds the right to reactivate the corridor. In any event, the city and other entities acquiring property interests in the corridor would seek compensation for the impacts to their property rights in the event a reactivation request is received.
The city has received some public comments about how quick the topic of acquiring the rail corridor has come up. But city officials have been discussing the issue since last fall, including some presentations from different groups on what to do with the rail line during Kirkland city council meetings.
“This is a conversation that has been going on for quite some time,” said Kirkland City Manager Kurt Triplett during Monday's study session. “… The council received a letter from Google today saying that they are very interested in us looking at acquiring (the rail line), as they look at whether or not they want to stay here or expand here.”
Google is one of Kirkland’s biggest employers. The rail line runs right behind the Google campus in the Houghton neighborhood.
“Everyone has asked ‘how do you make the Totem Lake Business district pop?’” said Triplett, noting that the rail line runs near Totem Lake Malls. “This is really the central spine that can connect it all. It is an amazing once-in-a-lifetime opportunity to really sync Kirkland from the bottom to the top and connect all the things that help our quality of life.”