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Thursday, February 12, 2004 - Page updated at 12:00 AM

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Underground lines at South Lake Union? It's a tangle of issues for city

Seattle Times staff reporters

Seattle City Light is considering a proposal to bury utility lines in the South Lake Union area that could add $200 million to $300 million to the price tag of redeveloping the neighborhood.

The agency wants political leaders to decide soon whether to put the lines underground and how to divide the cost among property owners, the public and private utilities.

"The mayor and council have a major piece of work to do," said City Light spokesman Bob Royer.

It won't be easy. Most Seattle City Council members have not yet been briefed on the matter and were not even aware a debate was coming.

The subject raises a tangle of complex issues. For example, can the city charge developers for undergrounding? Is the city obliged to absorb any of the costs? Will the new load of power-hungry biotech customers really materialize in the neighborhood? And, is the cost of burying utilities worth the benefits?

Mayor Greg Nickels and the City Council have advocated massive redevelopment of South Lake Union as a biotech hub to boost the local economy.

The chief reason for burying overhead power lines is aesthetic — it removes unsightly poles and improves property values. Burying wires costs about 10 times as much as running them above ground. Underground power lines also are more expensive to repair and maintain.

South Lake Union developers, such as Vulcan, Paul Allen's company, "love" undergrounding, according to City Light Project Manager Mike Clark. "But the next thing they (developers) say is they don't want to pay."

City Light estimates that putting electrical lines underground throughout South Lake Union would cost about $200 million. The cost of burying other utility lines, such as phone and cable TV, at the same time would bring the total underground cost to $331 million, according to a Jan. 16 City Light document.

These costs are in addition to the $160 million that City Light has already said it would need to build a new substation and upgrade South Lake Union's electrical system to serve proposed development.

City Light also estimated the cost of partial underground scenarios. Burying electrical lines near the city's park on the South Lake Union waterfront would run about $20 million. The price tag for underground conversion along four major streets would total roughly $46 million.

Other city departments, such as parks and transportation, have suggested that underground conversion is part of their vision for a redeveloped South Lake Union.

The high price and other factors may lead the city to consider "cost-sharing partnerships" with private developers on undergrounding, according to City Light documents.

Vulcan said it supports burying power lines because it would improve the look and feel of the South Lake Union area. All of Vulcan's buildings in the South Lake Union area were designed to accommodate underground utilities, said spokesman Michael Nank.

Whether Vulcan, which owns 53 acres in the neighborhood, would be willing to pay extra remains unclear.

"First and foremost, providing utility service is a government responsibility," Nank said. He added he wouldn't comment further until the city made a specific proposal.

The Fred Hutchinson Cancer Research Center has spent hundreds of thousands of dollars undergrounding power, telephone and cable lines as it has built its South Lake Union Campus. The primary benefit has been aesthetic, said Guy Ott, the center's retired facilities director.

"The idea of having million-dollar views and looking into ugly poles and wires and in many cases pole-mounted transformers ... wasn't a pleasant thing," Ott said.

Ott said the rest of South Lake Union is a prime candidate for undergrounding utilities, noting that it is common practice in today's office parks and downtown areas in the country.

Variables

Nickels isn't yet ready to recommend a policy for South Lake Union, said Deputy Mayor Tim Ceis.

"There are a lot of variables here," Ceis said. "If you take the most extreme case, it's a lot of money; the more narrow case is $40 million to $50 million."

Councilwoman Jean Godden, who chairs the City Light oversight committee, hasn't yet been briefed on the issue.

"I assure you we will have a number of questions," Godden said.

City Light's current policy states that those customers who benefit from underground conversion should pay the cost. But there are exceptions, such as for safety reasons. For some areas of South Lake Union, such as the city-owned waterfront park, it would be hard to charge private property owners for undergrounding, Ceis said.

"You probably don't want overhead wires through the park," he said. "The public probably has to pay for the park."

But in other areas, such as Mercer Street and Terry Avenue North, where the city wants to improve streetscapes, the prospect of who pays is more complicated.

"We have to look at how much is driven by public and private investment. That should determine who pays and how much," Ceis said.

Even then, questions remain about how much the city could charge private property owners. One City Light memo says charging developers an "impact fee" is probably not legal. Other options include creating an "undergrounding district" or local improvement district.

(The Seattle Times owns 16 acres in the South Lake Union area and recently announced that it wants to sell nearly five acres to bolster the newspaper's troubled finances.)

Public spending

Community activists already are furious about public spending on underground conversion in South Lake Union.

"This is an enormous waste of public resources we can't afford," said John Fox of the Seattle Displacement Coalition, which obtained initial underground cost estimates through a public-records request.

Fox also criticized Nickels for advocating South Lake Union redevelopment without divulging the potential costs of burying utilities in a recent economic study.

New development driven by Vulcan could create 23,000 jobs in 20 years, according to the study. Advocates say that is more than enough to justify the mayor's proposal to spend at least $421 million in public money on street, transit and other improvements in the area.

"They're trying to get our feet sunk in the quicksand before they reveal the real costs," Fox said.

Ceis disagreed, contending that the cost estimates were rough and "weren't ripe for analysis" when Nickels released and touted the South Lake Union study in November.

Ceis also said he's still not convinced that projections for massive new electricity demands in South Lake Union — which are driving several pending policy decisions — are accurate.

A 2003 City Light memo obtained by the Seattle Displacement Coalition said that South Lake Union electrical needs, projected by a city consultant to increase nearly 14-fold by the year 2020, appear to be overstated.

The memo notes that South Lake Union's projected "peak load" of 277 megawatts would be greater than the current load for Seattle's entire downtown network. To reach such a load, the memo said, South Lake Union would have to grow by 11 percent a year and commercial customers would have to consume electricity at nearly twice the national average.

To put this in perspective, the memo continued, the equivalent of 18 new Key Tower buildings would create a load of only 59 megawatts. That is about one-quarter of the load projected for South Lake Union.

Bob Young: 206-464-2174 or byoung@seattletimes.com.

J. Martin McOmber: 206-464-2022 or mmomber@seattletimes.com.

Copyright © 2004 The Seattle Times Company

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