Council moves closer to approving ADU code amendments; celebrates Pride Month

After 90 minutes of discussion plus numerous attempted — and two successful — amendments, the Edmonds City Council Tuesday unanimously agreed to move an update to the city’s accessory dwelling unit code to next week’s council consent agenda for approval.

The council also honored June as Pride Month, with Mayor Mike Rosen reading a proclamation that was accepted by Rowan Soiset of the Edmonds Diversity, Equity, Inclusion and Accessibility Commission. And it recognized Ride Transit Month with a resolution presented by Susan Paine to Brock Howell of Snotrac. Finally, it honored the Edmonds Youth Commission’s graduating high school seniors and heard the commission’s annual report.

Assuming final approval next week, the city will put into place regulations governing accessory dwelling units (ADUs) — both attached and detached — in Edmonds. The council has been discussing regulations related to ADUs for several years,  but the Washington State Legislature forced the issue with passage of House Bill 1337 in 2023. The City of Edmonds currently only allows attached ADUs, but under HB 1337 it must allow up to two ADUS per lot (attached or detached) by June 2025. The city has been moving to implement the regulations sooner so that they can be included as part of the 2024 Comprehensive Plan update.

The code update approved for next week’s consent agenda includes the following staff recommendations, some of which were dictated by state law:

• Allowing two ADUs on all lots in any configuration.
• Allowing a maximum height of 24 feet.
• Not requiring rear setbacks if the rear lot line abuts a public alley. Rear setbacks may be reduced to a minimum of 10 feet (5 feet for DADUs that are 15 feet in height or less) in the RS-6 and RS-8 zones.
• No setback requirements, yard coverage limits, tree retention mandates, or restrictions on entry door locations or aesthetic requirements that are more restrictive than for the principal unit.
• No design restrictions.
• Allowing ADUs up to 1,200 square feet, depending on the zoning area (RS-10, RS-12, RS-20). Incentives will be provided for reduced DADU heights in the RS-6 and RS-8 zones.
• Allowing ADUs to be sold as condominiums.
• Not requiring owners to reside in one of the units.
• Allowing impact fees of no more than 50% of the fees imposed on the principal unit.

During the discussion Tuesday, Council President Vivian Olson attempted several amendments. One of them would have reduced the maximum ADU size from the staff-recommended 1,200 square feet to the state-mandated minimum of 1,000 square feet in the city’s RS 10 and RS 12 zones, but that was defeated. Two others were aimed at increasing the size of rear setbacks for ADUs in RS 6 and RS 8 zones, which Olson said would address the concerns she had about neighborhood impacts. “It’s just way too close and I think we owe our residents more protection than that,” Olson said.

Those setback amendments received support from Councilmembers Neil Tibbott and Michelle Dotsch — and both were defeated by 3-4 votes, with Councilmembers Will Chen, Chris Eck, Jenna Nand and Paine voting against.

Olson did propose three other changes that were approved. The first was to remove the term “guest house” from the code update, since city staff determined that the definition was nearly identical to an ADU. The second — passed by a 4-3 vote (Chen joining Olson, Tibbott and Dotsch in support) — prohibits the construction of ADUs in critical aquifer recharge areas (CARAs), with a sunset date of June 30, 2025. Olson said the amendment follows recent council discussion regarding the possible impacts of development on CARAs. Prohibiting construction in those areas through June 2025 will provide more time for research results on the topic to become known, she added. The third Olson amendment was to insert a recommendation from the Edmonds Planning Board that parking will be required for a second ADU built on a lot. (City staff had recommended that no additional parking be required.) That motion passed 6-1, with Nand voting no.

Paine also attempted to amend the code update to require that the council’s decision become final Tuesday night, rather than waiting for approval as part of next week’s consent agenda, stating the ADU issue “has been heard over and over and over again.” Most councilmembers, however, expressed a desire to have one more touch on the matter next week, and Paine’s amendment failed 2-5 (Eck joining Paine in voting yes).

Following the ADU decision, the council turned its attention to possible financing options for the 10-acre Landmark 99 property located at the southern edge of Edmonds’ Highway 99 neighborhood. In May, the council heard details about a request for proposal received from primary developer J2 Housing, a Seattle-based company that focuses on building affordable housing. It includes between 826 and 1,000 units of “workforce housing,” with 648 units (80%) catering to those at 30% to 80% of area median income. The submitted proposal includes a mix of retail, apartments and townhomes.

The city has signed a purchase and sale agreement with an option to purchase the Landmark site. If the council decides to proceed, it would require the city and/or its assignees to place $1 million in earnest money down on the property by March 31, 2025, and close on the $37 million property no later than Sept.30, 2025.

Planning and Development Director Susan McLaughlin said the reason for discussing Landmark financing options is to ensure transparency with the council.

Marc Greenough of Foster Garvey, the city’s bond counsel, talked about the risks and rewards of the project. Risks include interest rates, which “have gone up significantly since this project was conceived,” along with increased construction costs. There is also the entitlement process, which includes design, community outreach and permitting — all of which can cause delays.

Rewards include the fact the developer J2 Housing may be able to bring in grants and loans to assist in project financing. “There’s a lot of money out there for housing right now and a lot of demand for workforce housing,” Greenough said. In addition, the project location makes it attractive for funding and partnerships, he said.

Greenough then discussed possible financing options for the purchase. The original idea was for the city to finance one fourth of the property purchase and the developer to cover the remaining three-fourths. “What we’ve tried to do is think if there isn’t some way of having the city bear the weight of financing the property for a little bit longer because the city has a better credit rating, the city has more access to capital,” Greenough said. “The developer is going to get really walloped by interest rate costs and delays that will cost the project as a whole.”

Among the financing strategies for the city:

– Buy all the property with the intent to declare a condiminium after the entitlements were in place.

– Buy the entire parcel and then give a permit to the developer to start contracting the property — either by ground leasing or through reciprocal easements and permits.

– Split the property up into several different parcels, which will allow the developer “to…bring in other developers who would perhaps want to have their own property to be working with,” Greenough said.

“We want to look at the various different ways that people can hold and acquire the property,” he said, adding that the city is taking the steps necessary “to have community renewal authority with this parcel. That gives you even more tools in your toolkit under the law to rearrange parcel to acquire property, dispose of property.”

When it comes to the actual financing, the council will need to decide whether it makes sense “to borrow a whole bunch of money upfront at 30 years at very low interest rates or does it make more sense to take on a construction loan and then figure out what the costs will be or be able to sell the property,” Greenough said, “and pay off some of that construction loan without having to borrow the entire amount for a long time.”

“This city’s cash position is obviously not as favorable as it has been in the past,” Greenough said, referring to Edmonds’ recent budget challenges. “And so the city may want to consider capitalizing interest, which means you are borrowing the interest and not paying any interest on the loan until substantial competition.”

Answering questions from councilmembers, Greenough stressed that the developer did not request the city take on more of the project financing.

“This was an idea that we worked on internally and just introduced to J2 recently,” Greenough said. “And we didn’t do it because they said they couldn’t get financing. It’s just been my experience over many decades in these types of projects that public financing is the least expensive, especially compared to developer financing.”

Prior to the council’s 7 p.m. business meeting, the council met in a work session to discuss options for how the City of Edmonds should receive fire and emergency medical services (EMS). The council on May 28 voted 4-3 to delay a resolution directing the city to begin negotiating terms of annexation into the South County Fire Regional Fire Authority. Instead, councilmembers agreed to hold a work session to further discuss the implications of the draft resolution, which expresses the city’s intent to proceed with RFA annexation. (The council did, however, pass a related resolution, which identifies joining the RFA as the preferred alternative for Edmonds.)

The council’s debate about fire and emergency medical services comes as costs continues to increase under the city’s current contract with the RFA, also known as South County Fire. In late 2023, the city received notice that South County Fire intends to terminate its current 20-year contract with Edmonds, effective Dec. 31, 2025. (Read more background on this in our previous story here.)

In response, Edmonds retained consulting firm Fitch and Associates to analyze its options. In its report discussed during the Edmonds council committee meeting May 14, Fitch outlined three alternatives: annex into the RFA, contract with the Shoreline Fire Department for services or restart Edmonds’ own fire department. (Edmonds disbanded its fire department in 2009 when the city began contracting for fire services.) The Fitch analysis compared costs, benefits, implementation tasks and timelines, and pros and cons.

What those new numbers indicate is that the $18.8 million cost of creating an Edmonds Fire Department “is near parity” with the $18.7 million cost of joining the Regional Fire Authority (RFA),” said Councilmember Neil Tibbott. However, he noted that $18.8 million to restart the Edmonds department would provide “basic fire service,” which doesn’t include current services provided by the RFA such as waterfront fire suppression, rescue services and community paramedic services.

“It’s not all the services we’ve come to expect with the RFA,” he added. “It’s apples to apples but the apples for the Edmonds Fire Department has a bite out of it — or two.”

Mayor Mike Rosen then talked about the administrative costs the city would absorb in running its own fire department.

As a reference point, the mayor said he contacted the City of Mukilteo, which has its own fire department, at a cost of $6 million with two fire stations. “They are half the population so double the population and add another fire station, and they are probably in the $16 million range,” Rosen said.

“There are additional impacts in building our own (fire station),” Rosen said. For starters, Edmonds would need to continue contracting for fire and EMS services while it was creating its own department. There would also be additional costs related to human resoures, payroll, accounts payable and mandatory training.

The equipment the city would be purchasing back from the fire authority, under the 2017 contract terms, would be used, so the city would need to have a fund for replenishing that equipment.

Councilmembers then had an opportunity to ask questions and make comments. Councilmember Eck said she worried about not having a community paramedic program, noting that a  fair percentage of those the program helps are senior citizens. Councilmember Paine noted that if Edmonds restores its fire department, the retirement and pension costs “will add to the burden of the city.” Councilmember Nand added that if Edmonds underfunded its emergency services and was using aging equipment, it could expose the city to liability.

Council assistant Beckie Peterson then went over the workflow for RFA annexation, which starts with the council submitting a resolution that it intends to pursue annexation. At that point, the city and the RFA meet to discuss terms and conditions of annexation, which includes updating contracts and agreements. After that, the RFA grants the city’s request to annex and the resolution is placed on a special election ballot for voters to decide.

Chen said it was important for the council “to think about a contingency plan for fire services” if the ballot measure fails.

Tibbott said that if the RFA moves forward and Edmonds becomes part of the fire authority, which is governed by a board of fire commissioners, it will be key for residents to engage in electing commissioners share the city’s priorities.

Counci President Olson then collected a list of unanswered questions from councilmembers, with answers promised prior to next week’s meeting. The council is scheduled to vote at that meeting whether to begin negotiating the terms of joining the fire authority.

— By Teresa Wippel