City will try to rebuy properties to fix 'Mercer Mess'

A City Council committee voted Tuesday to start the process of acquiring property to turn Mercer Street into a leafy boulevard, including land the city sold six years ago to Paul Allen's development company.

Because of rising real estate values, the land the city now needs to buy back from Vulcan will be more expensive, and critics of the city's huge investment in South Lake Union say the reversal demonstrates how the rush to promote growth there may have been hasty.

"The mayor and the council were caught up in the image of South Lake Union being a new biotech park without really doing the bottom-line analysis of what's our public cost and what's our public gain," said council President Nick Licata, who cast a dissenting vote.

In 2001, the city sold Vulcan eight parcels of land in South Lake Union, which it had bought decades ago for a freeway project that was never built, for $20.2 million. Then-Mayor Paul Schell planned only minor transportation fixes to the clogged Mercer corridor.

Since Mayor Greg Nickels took office, he has championed a $120 million plan to widen Mercer Street into a two-way, six-lane boulevard and turn Valley Street into a narrower, more pedestrian-friendly lane.

Proponents of that plan say the city needs to repurchase only about 10 percent of the land the city originally sold to Vulcan.

Most members of the City Council's transportation committee voted to allow staff members to start negotiating with the owners of 63 properties in South Lake Union that the city may need to carry out those changes.

There was little discussion of the fact that the city would be buying back some property it once owned. Instead, officials focused on the need to move forward on addressing the infamous "Mercer Mess."

City Councilman Peter Steinbrueck said the proposed solution is more than just a beautification project -- an oft-repeated criticism of the mayor's plan -- but a real redesign of the street that will repair the torn urban fabric of South Lake Union.

"I still support it. More than ever," he said. "I don't think we now pause, reconsider, backtrack and spend another 20 or 30 or 40 years diddling over it."

But council members did want assurances that the city wouldn't begin buying property until funding for the Mercer project is secured. Currently, the mayor's office is counting on $80 million in funding from a roads and transportation package that voters will consider this November.

Some residents said they were disappointed, but not surprised, by what they saw as the city being outsmarted by Allen's development company.

"It's unfortunate because it looks bad -- we're buying it back for more than we sold it for," said Pat Stambor, who believed in 2001 that city officials should have taken a more thoughtful, considered approach to disposing of the land. "Taxpayers are already thinking, 'why are we pushing so much money into South Lake Union?' "

Michael Mann, deputy director of the city's Office of Policy and Management, said it's not yet clear exactly how much the city would pay to acquire a 60-foot strip of land that runs along the north side of Mercer Street for the widening project. That will be determined by appraisals, he said.

He also said the people who negotiated the deal with Vulcan back in 2001 could not have foreseen that the city would want a small portion of that property back.

Lyn Tangen, director of community and government relations for Vulcan, said allegations that the company bought the land with intention of selling it back to the city at a profit were ludicrous.

For starters, since it was in the middle of the dot-com bust, it wasn't clear that land values would rise anytime soon, she said. The company wouldn't have invested millions of dollars on a prayer that the city would decide to improve Mercer Street and that the voters would fund it, she said.