Council rejects Magnuson lease

About 200 watersport enthusiasts packed Seattle City Council chambers Tuesday in a show of concern for the community boating center at Magnuson Park, which could soon be closed by the Department of Planning and Development.

Though City Council members said they supported Sail Sand Point, a nonprofit that runs the boating center, they overwhelmingly rejected a proposed long-term lease contract submitted by the Seattle Parks Department and said it was a bad deal for taxpayers.

The proposal would have given a developer as long as 50 years to run the site — known as Building 11 — and lacked specific guarantees that nonprofit sailing, kayaking and paddling clubs would retain their space.

"This contract is dead on arrival as far as I'm concerned," said Councilman Tom Rasmussen, who heads the council's parks committee, which rejected the lease. The committee voted to hire its own real-estate consultant to try to renegotiate a new long-term lease with the developer.

The controversy over the contract arises from a larger debate over how to pay for renovation of buildings at Magnuson Park that the city inherited from the military. The land once was a naval station, which closed in the 1990s.

Because the city didn't have enough money to renovate these buildings, in 2005 the parks department sought proposals from private groups to turn them into a theater, a recreation center, a tennis center and a gym.

But the city has been slow in approving deals with the private groups to make the renovations.

Several buildings are in such disrepair that city code-enforcement officials have been ordering the parks department to close them.

"The clock started ticking last December" when Building 27 was shut down, Parks Superintendent Tim Gallagher told council members. Officials followed up by closing Building 18, Gallagher said, and have indicated that Buildings 2 and 30 may be shut down as well. "[Building] 11 can't be far behind."

Parks officials estimate the cost of demolishing Buildings 2, 18, 27 and 30 at nearly $7 million, far less than the $46.7 million needed to bring them into compliance with the building code.

Though parks officials didn't have an estimate for Building 11, the developer proposed spending nearly $9 million to renovate the property under the deal the council rejected Tuesday.

Rasmussen said the proposed deal contained fatal flaws: It would have allowed non-recreation uses in Building 11, such as office space and restaurants; the 50-year term was longer than those given to other groups; and in return for upgrading the building, the developer wanted to lock in the current rent of $4 a square foot, subject only to cost-of-living increases.

Gallagher defended the lease contract and said his staff was confused by earlier conflicting messages from the council over supporting community groups and maximizing parks revenue.

The parks department says the deal would have upgraded Building 11 at no cost to taxpayers, kept ownership of the property with the city and preserved 90 percent of the building's first floor for park and recreational uses.

Leslie Keller, Sail Sand Point's treasurer, said the council committee's decision to reject the lease upset her and leaves the group in a precarious position.

"They can't guarantee the Fire Department is going to let us stay," Keller said. "They can say their intent is to keep us there, but they don't have the money and the time to make it happen."

Rasmussen said he wants the council to negotiate a new contract by the end of September.

Sanjay Bhatt: 206-464-3103