Seattle Sun Newspaper - Vol. 8, Issue 3, March 2004

Copyright 2004 Seattle Sun. Please feel free to use the article below in your research. Be sure to cite the Seattle Sun as your source.

POLITICALLY SPEAKING:

Regulatory reform may be antidote

for hard times

By JAMES BUSH

In a financial sense, Seattle City officials can identify with a struggling, recent college graduate with a low-paying McJob, too much credit card debt, and an Alaskan Way Viaduct threatening to collapse.

OK, most 20-somethings can't afford a viaduct of their own. Let's substitute a blown engine on a car that's two years away from being paid off. The City's reserve funds, its version of a savings account, have been depleted by a string of bad budget years. Aid from the state and federal governments (the City's version of a loan from Mom and Dad) seems unlikely.

Well, at least cities don't have student loans to pay off.

A recent financial analysis of Seattle's tax and revenue prospects show that the City's expenses are climbing faster than its projected revenues and that Councilmanic debt (City government's credit card) has quadrupled in the past decade. Eugene Wasserman, executive director of the Neighborhood Business Council, gave us the Cliffs Notes version: "They're out of money. Period. Forever."

Even under the report's "optimistic scenario" (with City government revenues growing 3.1 percent annually and costs growing at about 3.5 percent), Mayor Greg Nickels and the City Council will have to cut about $26 million from the budget each year over the next decade just to maintain the existing service level.

Which makes it hard to fathom how massive subsidies for South Lake Union biotechnology expansion can still be on the mayor's agenda. University District activist John Fox has discovered City documents outlining a plan to divert money from the proposed regional transportation ballot issue to fund the realignment of South Lake Union streets.

Touted as a plan to solve the so-called "Mercer Mess," the street fix actually has no regional transportation benefits; it's more of a massive traffic-calming project which would boost the property values of the mayor's biotech buddies (including billionaire Paul Allen). Shiftier still, the money would be disguised as viaduct replacement funding by renaming the project the "Viaduct Northern Portal." With the earthquake-damaged structure leaning more by the day and the mayor begging the feds for a billion in immediate aid, it's an unforgivable handout.

Nickels needs to realize that his much-touted economic agenda has succeeded so far because he's chosen first steps that don't cost anything. Dropping the University District Lease Lid? Free. Giving the biotechies two extra floors per building? Free. Cutting a deal at Northgate? Priceless, but still a regulatory fix.

Fooling with viaduct funding or financing a completely unnecessary South Lake Union streetcar just won't fly at a time when the Neighborhood Matching Fund doesn't have enough money to write checks.

Even the mayor's efforts to resurrect the City's tax-exemption program for multi-family housing seem a bit suspect in this economic climate. The program, which ran from 1999 to 2002, exempted real estate developers from property taxes on their building's value for its first 10 years in operation. Created as a tool to spur development in a few economically struggling neighborhoods, the mayor wants to extend the tax break to new development in the Northgate area, the U-District, and even rapidly growing South Lake Union area.

Not so fast, says City Council member Nick Licata, who proposes keeping Northgate on the list, but spiking the program in the mayor's other two Economic Development Priority Areas. Even though a portion of the apartments created are required to be "affordable," we're talking $905-a-month studios and $1,125-a-month two-bedroom units. "I'm not going to include areas that are exceeding their (comprehensive plan housing) goals and are not economically distressed," says Licata, who expects a tough battle with the mayor over this issue.

If Nickels is smart, he'll sit out that fight. The mayor is scrambling around trying to get things done in tough times, and people appreciate that. They don't appreciate it when it seems his goal seems to be to further enrich folks like Allen, Microsoft co-founder and Mercer Island billionaire.

Nickels may be on the right track with his latest University District housing proposals. His suggestion to boost allowed building heights on "The Ave." (a.k.a. University Way NE) from 65 feet to 85 feet will probably prove a non-starter (it was specifically considered and rejected during the neighborhood planning process). But, his proposals to lower parking requirements and eliminate the rule that apartment structures built on commercially zoned properties include first-floor commercial space might be applicable in other development-starved neighborhoods.

Likewise, the business community probably has any number of City regulations they'd like to see eliminated. As long as they don't constitute tax breaks, they're at least worth a look.

Regulatory reform, not handouts, should be the rule of the day for the City's economic recovery efforts. Remember, the best things in life are free.