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PDA Council Packet

Section I: PDA Council Agenda & Minutes ................................... 3

PDA Council Meeting Agenda June 27th, 2013 ................................................... 4

PDA Council Meeting Minutes May 30th, 2013 .................................................... 5

Section II: Executive Director’s Report ....................................... 14

Executive Director’s Report June 24th, 2013 ...................................................... 15

Section III: Key Presentations & Supporting Documents ... 23

Section IV: Consent Agenda Items ................................................. 24

Proposed Resolution 13-37: Lease Proposals - June 2013 .............................. 25

Proposed Resolution 13-41: Approval of 2012 Audited Financial Statements .. 27

Section V: New Business Items ....................................................... 28

Proposed Resolution 13-38: Proposed Contract with Trade-Marx Sign & Display

for Fabrication & Installation of Phase I Signage of the Wayfinding Signage

Project ................................................................................................................ 29

Proposed Resolution 13-39: Authorization for Contract Authority - Atrium Loft

and Elliott Bay Room - Economy Atrium Audio and Visual Equipment ............ 30

Proposed Resolution 13-40: Update to Trademark Policies and Expansion of

Federal Registrations .......................................................................................... 31

Proposed Resolution 13-42: Authorization for Contract Authority for Farmers

Market Consumer Research ............................................................................... 33

Section VI: PDA Committee Minutes.............................................. 34

Waterfront Redevelopment Committee Minutes June 4th, 2013 ....................... 35

PDA Council Packet 06.27.13

Asset Management Committee Draft Minutes June 10th, 2013 ......................... 38

Market Programs Draft Committee Minutes June 13th, 2013 ............................ 43

Finance Committee Draft Minutes June 18th, 2013 ........................................... 48

Section VII: Financials & Additional Enclosures . ................... 51

Financial Statements for May, 2013 .................................................................. 52

Pike Place Market PDA Financial Report December 31, 2012 .......................... 61

*Please Note: Some of the PDA Committee Meeting Minutes may not be

available in this Packet due to the scheduling of the meetings and early

distribution of the Packet materials.


Section I


PDA Council - Meeting Agenda Date: Thursday, June 27th, 2013

Time: 4:00 p.m. – 6:00 p.m.

Location: Elliott Bay Room

Council Members: James Savitt (Chair), John Finke (Vice-Chair), Ann Magnano, Gloria Skouge, Patrick Kerr,

Bruce Burger, David Ghoddousi, Jackson Schmidt, Matt Hanna, Patrice Barrentine and

Betty Halfon

4:00pm I. Administrative:

A. Approval of the Agenda

B. Approval of the PDA Council Meeting Minutes for May 30th, 2013

Chair

4:05pm II. Public Comment Including the Market Community

4:15pm III. Reports and Information Items

A. Council Chair Report

B. Executive Director’s Report

C. Committee Chair Report

D. Other Reports

James Savitt

Ben Franz-Knight

4:25pm IV. Key Issues Presentation and Discussions

A. Schematic Design Progress and Status - Pike Place Market Waterfront

Entrance

i. Action Item: Proposed Resolution 13-43: Pike Place Market Waterfront

Entrance (PC1N) Design and Development Planning – Housing Option 3

Miller Hull

Ben Franz-Knight

5:05pm

V. Resolutions and Other Action Items (Old and New Business)

A. Consent Agenda

Proposed Resolution 13-37: Lease Proposals - June 2013

Proposed Resolution 13-41: Approval of 2012 Audited Financial Statements

B. New Business

Action Item: Proposed Resolution 13-38: Proposed Contract with Trade-

Marx Sign & Display for Fabrication & Installation of Phase I Signage of the

Wayfinding Signage Project

Action Item: Proposed Resolution 13-39: Authorization for Contract

Authority – Atrium Loft and Elliott Bay Room – Economy Atrium Audio and

Visual Equipment

Action Item: Proposed Resolution 13-40: Update to Trademark Policies

and Expansion of Federal Registrations

Action Item: Proposed Resolution 13-42: Authorization for Contract

Authority for Farmers Market Consumer Research

C. Other

Ben Franz-Knight

5:25pm VI. Further Public Comment

5:30pm VII. VII. Closed Session

A. Midore Building Discussion – 1501 Western Avenue (Closed Session Per (RCW

42.30.110(1)(b))

Chair

5:55pm VIII. VIII. Concerns of Committee Members

6:00pm IX. IX. Adjournment Chair


Pike Place Market Preservation and Development Authority (PDA)

COUNCIL MEETING MINUTES – May 30th, 2013

Elliott Bay Room

Council Members: James Savitt, Ann Magnano, Gloria Skouge, Betty Halfon, David Ghoddousi,

Bruce Burger, Patrick Kerr, Matt Hanna, Gerry Kumata

Staff Present: Ben Franz-Knight, Tamra Nisly, Kelly Lindsay, John Turnbull, Steve Nelson,

Jennifer Maietta, Emily Crawford, Zack Cook, Melissa Balding, Joe Paar, Dianna

Goodsell

Others Present: Mike: Howard Aller, Haley Land, Bob Messina, Joan Paulson, Haley Land, Ralph

Brems, Gerry Johnson

The meeting was called to order at 4:00 p.m. by James Savitt - Chair

I. Administration

A. Adoption of Agenda

The agenda, as amended, was approved by acclamation

Jim Savitt included the addition of item E under section III, Nominating Committee Report and

Recommendation of Proposed Resolution 13-36.

B. Review and Approval of the April 25th, 2013 Meeting Minutes

The meeting minutes were approved by acclamation

Matt Hanna entered in at 4:01p.m.

II. Public Comment Including the Market Community

None

III. Reports and Information Items

A. Council Chair Report

Jim Savitt presented the Council Chair Report for the month of May. He noted three important

resolution items regarding the PC-1 North Project on the evening’s agenda including; Proposed

Resolution 13-33: Approving Cooperation Agreement with WSDOT, authorizing the Executive

Director to complete negotiations for the second WSDOT Parking Mitigation Agreement and

Acknowledging Satisfaction of up to $1million of the contingency in the MOU with the City of Seattle,

Proposed Resolution 13-34; Authorization for Contract Authority - Shiels Obletz Johnsen, Inc. - PC-1

N Project Management Services and Proposed Resolution 13-35: Authorization for Contract Authority

- Beacon Development Group - Low -Income Housing Finance Consultant - PC1-N. He noted that

over the next coming months, the Market community and public will be addressing the finalization of

uses for PC1- North including the layout, interior, look and feel of the space. He reported that there

is a community meeting set forth on June 12th from 4:00p.m. To 6:00p.m in the Elliott Bay Room with

Miller Hull. He reported that there is a resolution today regarding recommendation regarding farm

strategy. He lastly reported the following Council and Committee items for the month of June; Atrium PDA Council Packet 06.27.13

85 Pike Street, Room 500 Seattle, WA 98101 (206) 682-7453 www.pikeplacemarket.org

Kitchen and Midore Closed Session discussion returns in June to the Full Council, Commercial

Department Review, Parking and Garage Strategy returns to Asset Management and Marketing

Strategy, Trademark Policy and Farm Issues returns Market Programs.

Betty Halfon entered in at 4:04p.m

i. Security Matters

There was a brief update regarding security matters. Jim Savitt noted that he does not have reason to

believe that we need additional security staff at this time. He noted the possibility of conducting some

sort of audit or assessment on our current security operations.

B. Executive Director’s Report

Ben Franz-Knight presented the Executive Director’s Report for the month of May. He noted that

there was a written report included in the packet. He noted an article from the June Market Insider

which reports that in 2012, the Market recycled 24,954 gallons of cooking oil, which were turned into

22,458 gallons of biodiesel; this prevented 362,046 pounds of carbon from entering the atmosphere.

He lastly noted that we are at the lowest vacancy rate under Commercial at the Market since pre-

renovation with only one vacant commercial space left.

Jim Savitt inquired about the status of the Fairley Wall replacement. Ben Franz-Knight noted that SHKS

architects did an assessment on the wall; the bid package would go out by Monday with an update to

the Council by July.

C. Committee Chair Report

None

D. Other Reports

None

E. Nomination Committee Report - Action Item: Proposed Resolution 13-36: PDA Council Member

Nomination

Bruce Burger presented the resolution which states that the PDA Council selects annually one

member to serve on the PDA council, subject to approval by the Seattle City Council of such

selection: and, WHEREAS, Gerry Kumata who served Four (4) terms on the PDA Council elected not

to seek re-appointment for an additional term beginning July 1, 2012; and, WHEREAS, the PDA

Council Nominating committee conducted a thorough and deliberate search for qualified candidates

and considered the current needs of the Council and the Council’s focus on food and farm strategy;

and, WHEREAS, the process included review of potential candidates’ qualifications and in-person

interviews; and, WHEREAS, the Nominating Committee recommends the selection of Patrice

Barrentine, who currently holds the position of Outreach and Education Coordinator for the

Washington State Department of Agriculture and has an extensive background in farm and food issues,

policy, food justice, agritourism and food retailing;

NOW, THEREFORE BE IT RESOLVED, that the PDA Council hereby selects Patrice Barrentine as its

PDA Council Appointed member to serve on the PDA Council for the remainder of the term ending

at its regular meeting in July, 2016.

Bruce Burger moved, Ann Magnano seconded.

There was a brief discussion that followed.

Jim Savitt distributed Patrice Barrentine’s resume to the PDA Councilmembers. He discussed the

process of appointing a replacement for Gerry Kumata’s open council seat. It was noted that there

was a consideration of 25 candidates, in which four of those candidates were interviewed by the

Nominating Committee. In choosing the appropriate candidate there was consensus of farm policy

expertise for the open Council position.

Patrick Kerr inquired if Patrice Barrentine had any ties to the Pike Place Market.



Gloria Skouge noted that Patrice Barrentine was very enthusiastic and quick in regards to her

interview process. She added that it was clear that farm and food matters were part of her future

career plans.

Jim Savitt noted that Patrice Barrentine will sit on the PDA Council as soon as her PDA Council

appointment paperwork has been processed by the City of Seattle.

For: Jim Savitt, Bruce Burger, Matt Hanna, Betty Halfon, Gloria Skouge, David Ghoddousi, Gerry

Kumata, Ann Magnano

Against: Patrick Kerr

Abstained: 0

Resolution 13-36 passed with a vote 8-1-0

Jim Savitt gave thanks to Gerry Kumata’s and Bruce Lorig’s valuable contribution to the Community

and PPM PDA Council. He noted that with the departure of both Gerry Kumata and Bruce Lorig in

both proximity, there is certainly expertise we are losing from the PDA Council; he reported that the

Nominating Committee would be addressing this issue. Jim inquired through each PDA

Councilmember of the synopsis for what areas the PDA Council should be looking in regards to

experience and expertise with replacement of Bruce Lorig’s Open Council seat.

There was feedback received from the current PDA Council members regarding areas of expertise to

look at for the open Council position. A summary of the PDA Council feedback is as follows;

Patrick Kerr noted that he would look for someone with Development and Retail oriented experience

Betty Halfon noted that she would look for someone with Development and Architecture experience.

David Ghoddousi noted that the candidate should have experience with Finance execution and has

experience with working and execution on a project.

Gerry Kumata noted that we should look for someone with direct professional Property Management

experience as well as Development experience. He added that additional farm expertise is useful as

well.

Bruce Burger noted that we should look for someone with Property Management, Development and

Finance expertise.

Matt Hanna was in agreement with Bruce Burger but did not feel the need to have as much

development expertise since we have contracted consultants with development expertise

Ann Magnano noted that she had agreed with the suggestions from the PDA Councilmembers; she

would like to see greater farm representation on the Council though. She also noted that the Market

should be fairly represented and would like to see more diversity on the PDA Council.

Jim Savitt noted that next month will be his last meeting as Chair of the Pike Place Market PDA

Council. He noted that he is stepping down from his Council position which there will be a new Chair

for the July’s PDA Council meeting.

IV. Key Issues Presentation

A. PC-1 North Issues

Ben Franz-Knight noted that there was a proposed resolution for the evenings meeting regarding the

WSDOT Parking Mitigation Agreement with the PPM PDA. He gave an overview on the 45 day

Statutory Public Process regarding possible impacts of the proposal noted in the resolution below. He

had Gerry Johnson walk through the final draft Cooperation Agreement with WSDOT authorizing the

Executive Director to complete negotiations for the second WSDOT Parking Mitigation Agreement

and Acknowledging Satisfaction of up to $1million of the contingency in the MOU with the City of

Seattle. Gerry Johnson noted that with the agreement with WSDOT, we the PPM PDA agree not to

raise our parking rates, besides in small incremental changes, in return for 1 million dollars. He



discussed the other considerations as well to receive the remaining 4 million dollars for the PC-1

North project.

i. Action Item: Proposed Resolution 13-33: Approving Cooperation Agreement with WSDOT,

authorizing the Executive Director to complete negotiations for the second WSDOT Parking

Mitigation Agreement and Acknowledging Satisfaction of up to $1million of the contingency in the

MOU with the City of Seattle

Ben Franz-Knight introduced the resolution which states that the Pike Place Market Preservation and

Development Authority (“PPMPDA”) Council (“Council”), pursuant to its Resolution 13-07 approved

and authorized its Executive Director (“Executive Director”) to execute that certain Memorandum of

Understanding (“MOU”) Concerning Redevelopment of the PC-1 North Site Within the Pike Place

Market Historical District by and between the City of Seattle (“City”) and the PPMPDA; and

WHEREAS, the MOU specifically provided, in relevant part, that “[t]he PPMPDA currently anticipates

securing its share of PC-1N design costs incurred after January 1, 2013 from funds available from the

SR 99 bored tunnel project for replacement of surface parking that will be lost when the Viaduct is

demolished. The PPMPDA’s commitment to continue to fund its share of ongoing design costs is

contingent upon the availability of such funding. If such funding is not available, the PPMPDA may

continue to fund its share of such costs using other resources or it may suspend design development

until the Parties can agree on alternative for funding design”; and WHEREAS, the Executive Director

has concluded negotiation of a Cooperation Agreement (“Cooperation Agreement”) between the

Washington State Department of Transportation (“WSDOT”) and the PPMPDA (attached) under

which agreement WSDOT will pay the PPMPDA One Million Dollars ($1,000,000) in exchange for the

PPMPDA’s agreement to execute and record a restrictive covenant restricting the use of 450 parking

spaces located in the PPMPDA PC-1S parking garage to short-term parking at specified rates for a

period of three (3) years; and WHEREAS, the Executive Director currently is negotiating an

additional agreement with WSDOT that likely will take a form substantially similar to the Cooperation

Agreement under which additional parking spaces, likely restricting additional spaces to be constructed

in the context of the PC-1N development project contemplated under the MOU reflected in another

restrictive covenant in exchange for the payment by WSDOT of an additional Four Million Dollars

($4,000,000) to PPMPDA; and WHEREAS, the following actions represent or contemplate actions

identified in the PPMPDA Charter that are subject to completion of the Special Disclosure and Review

Process before final action by the PPMPDA Council:

1. Approval of authorization for the Executive Director to execute the Cooperation

Agreement;

2. Approval or ratification of a second agreement with WSDOT restricting additional

PPMPDA parking spaces for short term use, including spaces eventually to be provided in

the PC-1N project; and

3. Security arrangements and other encumbrances that almost certainly will be required for

financings that will need to be put in place in conjunction with the PC-1N project.

WHEREAS, over the past several weeks, the PPMPDA has undertaken and completed the Special

Disclosure and Review Process required under the Charter addressing such matters; and WHEREAS,

upon Council approval of the Cooperation Agreement and its subsequent approval or ratification of

the Executive Director’s execution of the second parking mitigation agreement, the contingency for

the PPMPDA to continue to fund its share of PC-1N design costs after January 1, 2013 will have been

satisfied. Now, therefore, BE IT RESOLVED that:

1. The Executive Director is authorized to execute the Cooperation Agreement with WSDOT

substantially similar to the attached draft;

2. The Executive Director is authorized to complete negotiation of and, if necessary and

expeditious, execute, subject to Council ratification, the second parking mitigation agreement

with WSDOT; and

3. Upon receipt of the One Million Dollars ($1,000,000) from WSDOT to be provided to the

PPMPDA pursuant to the Cooperation Agreement, satisfaction of the contingency reserved in



the MOU for the PPMPDA to continue to fund its share of PC-1N design costs after January

1, 2013 is confirmed up to the amount of the One Million Dollars ($1,000,000) provided

under the Cooperation Agreement. Upon approval or ratification of the second parking

mitigation agreement and the receipt by the PPMPDA of an additional Four Million Dollars

($4,000,000) from WSDOT, the MOU contingency for the PPMPDA to continue to fund its

share of PC-1 design costs shall be completely satisfied and the PPMPDA, in conjunction with

the City, will proceed to fully implement the MOU.

Ann Magnano wanted to make sure that if we needed to pay debt on the garage, she did not want that

to affect the rates of the Market merchants and tenants.

Matt Hanna moved, Gerry Kumata seconded

For: Bruce Burger, Gerry Kumata, Betty Halfon, David Ghoddousi, Gloria Skouge, Matt Hanna, Ann

Magnano, Patrick Kerr

Against: 0

Abstained: Jim Savitt

Resolution 13-33 passed with a vote of 8-0-1

ii. Action Item: Proposed Resolution 13-34: Authorization for Contract Authority - Shiels Obletz

Johnsen, Inc. - PC-1 N Project Management Services

Ben Franz-Knight introduced the resolution which states that in order to maintain the viability of the

Pike Place Market the PPMPDA has undertaken an effort to identify and address issues and

opportunities related to the design of the Central Waterfront and the development of parcels adjacent

to the Market including PC-1N that may directly affect the future of the Market, WHEREAS, the

PPMPDA has determined that Project Management services are necessary for the design, development

and construction of the PC-1N project; and, WHEREAS, the PPMPDA conducted a public process and

issued a Request for Qualifications (RFQ) for Project Management Services in accordance with its

Purchasing Guidelines and received nine (9) proposals, and conducted interviews of four (4) finalists,

Shiels Obletz Johnsen, Inc. was identified as the best qualified; and, WHEREAS, the PPMPDA and is

now ready to enter into contract with Shiels Obletz Johnsen, Inc. in an initial amount not to exceed

$250,000 for project management services as specified in the contract for Consultant Project

Management Services for PC1N; and, NOW THEREFORE, BE IT RESOLVED that the PDA Council

authorizes the PDA Executive Director or his designee, to enter into contract with Shiels Obletz

Johnsen, Inc. for Project Management Services for PC-1N, for an initial amount not to exceed

$250,000; and, The funds for this project will be drawn from the PDA CRRF – Capital Reserve and

Replacement Funds.

Ben Franz-Knight provided an overview of the chosen candidate Shiels Obletz Johnsen SOJ. He noted

that Ken Johnsen and the team presented a very direct approach in their interview as a team

perspective. He provided a background on the team which includes; Justine Kim as the Project

Manager and Carrie Holmes as the Deputy Project Manager for the PC-1 North Project. He

mentioned that SOJ is also the City’s Project Management team for the Waterfront Project. He noted

that we have inserted language clearly stated in the contract with SOJ; this would authorize to

advocate the policies approved by Council if there were to be a conflict to arise with the City.

Matt Hanna moved, Betty Halfon seconded


Bruce Burger inquired about the anticipated costs for the Project Management Services for PC-1

North through the end of the year and all the way through the end of the project.

Ben Franz-Knight noted that the authorization of up to $250,000 would be the amount expected to

through the end of the year; the Project Management Services for the entire PC-1North Project is

estimated to be near 1.7-2.3 million dollars.



Patrick Kerr noted that he was a part of the interview process for the Project Management Services

for PC-1North. He noted that the issue came up during the interview process with SOJ working with

the Waterfront Project. He noted that we need a Project Manager that fully supports our project and

was concern over the conflict of interest with SOJ. He did note that SOJ was the best qualified

candidate out of the ones interviewed though.

Matt Hanna echoed the similar concerns to what Patrick Kerr noted in regards to SOJ’s involvement

with both the Waterfront Project and PC1-North. He noted that he thinks the potential synergies that

are coming out of this outweigh the potential risks.

David Ghoddousi inquired if Ken Johnson had consulted with the City regarding his interest with

participation with the Market and with the PC-1 North Project.

Ann Magnano noted she had high regard for Ken Johnson and has the upmost respect for him. She

noted that she is in favor of the proposed resolution.

Ben Franz-Knight noted that we can expect regular reports to Council and Committee’s regarding the

PC1-North Project Management Role.

For: Gerry Kumata, Betty Halfon, David Ghoddousi, Gloria Skouge, Bruce Lorig, Patrick Kerr, Matt

Hanna, Ann Magnano

Against: 0



iii. Action Item: Proposed Resolution 13-35: Authorization for Contract Authority - Beacon

Development Group - Low -Income Housing Finance Consultant - PC1-N

Ben Franz-Knight introduced the resolution which states that in order to maintain the viability of the

Pike Place Market the PPMPDA has undertaken an effort to identify and address issues and

opportunities related to the design of the Central Waterfront and the development of parcels adjacent

to the Market including PC-1N that may directly affect the future of the Market, WHEREAS, the

PPMPDA has determined that Low-Income Housing Finance Consultant services are necessary for the

design, development and funding of the PC-1N project; and, WHEREAS, the PPMPDA conducted a

public process and issued a Request for Qualifications (RFQ) for Low-Income Housing Finance

Consultant Services in accordance with its Purchasing Guidelines and received four (4) proposals, and

conducted interviews of four (4) finalists, Beacon Development Group was identified as the best

qualified; and, WHEREAS, the PPMPDA and is now ready to enter into contract with Beacon

Development Group in an initial amount not to exceed $27,000 for services as specified in the

contract for Low-Income Housing Finance Consultant Services for PC1N; and, NOW THEREFORE,

BE IT RESOLVED that the PDA Council authorizes the PDA Executive Director or his designee, to

enter into a contract with Beacon Development Group for Low-Income Housing Finance Consultant

Services for PC-1N, for an initial amount not to exceed $27,000; and, The funds for this project will be

drawn from the PDA CRRF – Capital Reserve and Replacement Funds.

Matt Hanna moved, Gloria Skouge seconded


For: Bruce Burger, Matt Hanna, Gerry Kumata, Betty Halfon, David Ghoddousi, Gloria Skouge, Patrick

Kerr, Ann Magnano

Against: 0



B. Farmland Preservation Presentation



Ben Franz-Knight and Kelly Lindsay gave a presentation on Farmland Preservation and Farm Program

Strategy Report. A copy of the presentation was included with the meeting minute’s record. Kelly

discussed the King County Farm models and noted that the demand for small farmers to sell direct is

increasing while the farmland is decreasing. She gave an overview of current opportunities for the PPM

PDA regarding Farmland Preservation including recommendation for Strategic Partnership with the

City of Seattle and King County. There was a resolution included under this section that followed

below.

i. Action Item: Proposed Resolution 13-29: Approval of Goals for Preservation of Farmland in the

Puget Sound Region and Strategic Partnership with City of Seattle and King County to Evaluate

Opportunities for Action

Kelly Lindsay introduced the resolution which states that the on October 7th, 1907 the Seattle City

Council adopted ordinance No. 17187 establishing Pike Place as a public market for the sale of “fresh

fruits, vegetables, berries and other farm and garden products, and accept also butter, eggs, cheese,

poultry, meats, lard and preserved fruit and vegetables raised, produced or manufactured by the

person selling or offering the same for sale”; and, WHEREAS, the PDA Charter states:

“the PDA, as a public trustee with the mission to ensure that the traditional character of the Public

Market is preserved, is authorized to perform renewal, rehabilitation, preservation, restoration,

development, and non-profit management of structures and open spaces in the above-described areas

in a manner that affords a continuing opportunity for Public Market farmers, merchants, residents,

shoppers, and visitors to carry on their tradition of market activities. In addition to upgrading

structures and public amenities in and around the Market Historical District, the PDA will initiate

programs to expand food retailing in the Market Historical District, especially the sale of local farm

produce…”; and,

WHEREAS, access to markets within a reasonable driving distance is a significant factor in the

profitability of small and mid-sized farmers who sell directly to consumers, and; WHEREAS, the Puget

Sound region has lost more than 58% of its farmland since 1950, and; WHEREAS, in 1979, King

County voters approved an initiative authorizing the county to preserve rapidly diminishing farmland,

resulting in the Farmland Preservation Program, which has acquired the development rights on

13,400 acres of high quality farmland, and; WHEREAS, on February 28th, 2013 the PDA Council

approved Resolution 13-12 identifying Strategic Goals and Programs (“a-f”) Intended to Increase

Farmer Profitability and Enhance Support of Small and Independent Farmers at Pike Place Market, and;

WHEREAS, Strategy “e” - Investigating opportunities for the PDA to participate in farmland access,

preservation and to include a farmland trust land has been the subject of detailed study by PDA staff

and the Market Programs Committee, including review of opportunities for purchase of land with the

PCC Farmland Trust, management agreements for property with King County, potential strategic

partnerships, analysis of current market farmer needs and status in relation to land access, and review

of detailed business analysis for sustainable farm operations, and; WHEREAS, King County, the City of

Seattle and Pike Place Market have identified shared goals for the preservation of farmland, specifically

to:

Increase production of food in King County/Puget Sound to meet rising demand for fresh food

products

Preserve farmland for the production of fresh food in King County and Puget Sound

Increase the profitability of small and mid-size farm operations

Increase the number of small and mid-size farm operations and total acres in production

Provide access to land for emerging farmers, immigrant and low-income populations

Support easier access to consumers through farmers markets and aggregation

Increase access to healthy foods for children, seniors and low-income populations

Strengthen institutional and wholesale relationships to small farm operations (hospitals, schools,

restaurants)



Support a robust and healthy regional food network, and;

WHEREAS, King County, the City of Seattle and Pike Place Market are interested in developing a

collaborative partnership to identify the actions that would be most effective in preserving farmland in

King County sufficient to meet shared goals, examples of which may include but are not limited to the

following: a new Farmlands Preservation bond or levy; increased Transfer of Development Rights;

purchase of Development Rights; agricultural legacy development credits; conservation easements;

food levy; purchase of land to lease to new farmers; other financing mechanisms and regulatory

approaches.

NOW THEREFORE BE IT RESOLVED; that the PDA contribute an amount not to exceed $10,000

towards a jointly funded effort between the PDA, King County and the City of Seattle with the

objective of developing a joint farmland preservation strategy to identify financing and regulatory

mechanisms that King County, City of Seattle and Pike Place Market PDA can act upon and/or support

that would be most effective for preserving farmland in King County, and;

AND BE IT FURTHER RESOLVED;

that the PDA Council will continue to review opportunities with early action potential for achieving

the shared goals through strategic partnerships, property management agreements, land acquisition, or

other activities on a case-by-case basis that are consistent with the PDA Charter and operating rules

and regulations.

Bruce Burger moved, Ann Magnano seconded

There was a discussion that followed.

Matt Hanna noted that he understands and appreciates the strategic partnerships with the City and

County. He voiced his concern with spending all of our energy with shared goals; he would be in favor

of developing strategies that would directly impact goals that we have established.

Ann Magnano noted that we need to look at the bigger picture and that we need a partner to help us

continue to be a farmer’s market.

David Ghoddousi proposed a friendly amendment to remove the language under paragraph 9 “

purchase of Development Rights and purchase of land to lease to new Farmers” and remove the

language under paragraph 11, “ property management agreements and land acquisition”. Bruce Burger

did not accept the changes to the resolution. David Ghoddousi moved the amendment, Patrick Kerr

seconded David’s motioned.

Ben Franz-Knight provided clarification under paragraph nine that the reference to the purchase

Development Rights and the purchase of land to lease to new farmers. He noted that the language in

the last “Whereas” paragraph refers to some of the responsibilities the City or County would assume

and not us.

Ann Magnano was opposed to David’s proposed amendment to Resolution 13-29.

The PDA Council voted on the proposed amendment first.

For: Patrick Kerr, Jim Savitt, Gloria Skouge, David Ghoddousi

Against: Gerry Kumata, Matt Hanna, Bruce Burger, Ann Magnano

Abstain: Betty Halfon

The proposed amendment failed with a vote 4-4-1

Matt Hanna proposed a friendly amendment to the original resolution. He proposed to include the

new language under the last paragraph, following after the sentence that states “that the PDA Council

will continue to review opportunities with early action potentials for achieving…” inserting the new

language which states that “the goals of the PDA to increase the number of farmers selling at the Pike

Place Market …”



Bruce Burger and Ann Magnano accepted the changes to the resolution.

The PDA Council voted on Proposed Resolution 13-29 as amended.

For: James Savitt, Gerry Kumata, Betty Halfon, Gloria Skouge, Ann Magnano, Matt Hanna, Bruce

Burger, Patrick Kerr

Against: David Ghoddousi

Abstain: 0

Amended Resolution 13-29 passed with a vote of 8-1-0.

V. Resolutions and Other Action Items (Old and New Business)

A. Consent Agenda

Action Item: Proposed Resolution 13-30: Lease Proposals - May 2013

Action Item: Proposed Resolution 13-32: Management Fee Payable to Market Foundation for the

Arcade Lights Event

Motion to approve the consent agenda

David Ghoddousi moved, Gerry Kumata seconded

For: John Finke, Gerry Kumata, Betty Halfon, David Ghoddousi, Gloria Skouge, Bruce Lorig, Ann

Magnano, Matt Hanna, Bruce Burger, Patrick Kerr

Against: 0

Abstain: James Savitt

Consent agenda passed with a vote 8-0-1

B. New Business

None

C. Other

None

VI. Further Public Comment

Haley Land provided several comments from the evenings meeting. He noted that there should be

appropriate signage in the Market that includes the Market Security’s number. He commented on

Patrice Barrentine’s appointment to the PDA Council noting that she sounds like a great choice for

the Council; he hopes that she can get to know the Farmers at the Market. He brought up a concern

regarding the safety of the slabs and noted a recent incident with one of the craftspeople. He lastly

noted that Elliott Bay room is far superior for presentations than in the previous PDA Council meeting

room near the PDA Front Office.

Joan Paulson commented on the chosen PC1-North Project Management Services Consultant and her

concerns over conflict of interest with their involvement with the Seattle Waterfront Project and

PC1-North. She commented on the Farmland Preservation presentation and Security Issues for the

Market. She noted that we need to think of other alternatives for farming and that we need to have a

Market emergency plan that incorporates the Market security into the plan. She lastly thanked Gerry

Kumata for his service of 17 years on the PDA Council.

VII. Concerns of Council Members

Patrick Kerr asked Ben Franz-Knight to make sure to address the issue of safety on the slabs at the

next Asset Management Committee Meeting.

VIII. Adjournment

The meeting was adjourned at 6:22p.m. by James Savitt, Chair

Meeting minutes submitted by:

Dianna Goodsell, Administrative Services Coordinator


Section II


Date: June 24, 2013 To: PDA Council From: Ben Franz-Knight Subject: Executive Director’s Report – June 2013 SUMMARY Nearing the end of June, the Market is in full swing for the Summer season. We have made great progress on the Pike Place Market Waterfront Entrance (PC1N) project and kicked off our three Express Markets at City Hall, South Lake Union and Pioneer Square. Following approval of the Cooperative Agreement with WSDOT, the agreement has been executed and recorded with the $1 million payment in process at WSDOT. Schematic Design work on the Pike Place Market Waterfront Entrance (PC1N) is also moving forward with multiple meetings including a second Community Meeting, Constituency, MHC and several WRC meetings. The modernization of garage elevators has been completed and is awaiting final inspection for the 2nd elevator for the week of June 24th. The Economy Atrium and Elliott Bay meeting room use is also growing with various regular Market uses as well with increasing rentals for retreats, meetings and events. Tenant improvement work continues for Roberto’s Venetian Trattoria on the Hillclimb and Storyville Coffee in the Economy Market. Storyville anticpates opening in July while Roberto’s Venetian Trattoria anticipates opening later in the summer. Rachel's Ginger Beer is rapidly completing improvements in the First and Pine Building and also plans on opening mid-summer. Key Strategic Issue efforts for the month of May included a review of current parking garage operations, trademarke policy and significant work on the scematic design for the Pike Place Market Waterfront Entrance. Finally, the Foodbank Expansion has been completed in which all are invited to attend the Grand Opening on Thursday, June 27th following the PDA Council Meeting. KEY OPERATING METRICS

Commercial Tenant Sales as Compared to Previous Year*

Year to Date Sales (April 2013): 7%

Restaurants: 4%

Food: 7%

Mercantile: 14%


Operating Income After Required Reserves and Debt Service:

Annual Goal $1,884,836

Year to Date: May 2013 $593,916**

Farm and Daystall Attendance

Change from May 2012 to May 2013

Craft 1.7%

Farm 1.7%

*Several charts are also attached highlighting year-over-year sales trends through March with

partial sales reported for May 2013. ** Actual performance is $401,137 over budget.

Operating Income after Required Reserves and Debt Service Commercial sales for April 2013 were up 7% over 2012 based on sales reports received through May 24. Mercantile and Food sales show the strongest growth year-over-year with restaurants down slightly over the same period for 2012. Farm and Craft Attendance Craft attendance was down slightly in May compared to the prior year. Farm attendance for the month of May was up from May 2012. Added two new farmers were added in May–Yakima Nation Fruit and Produce and Rick Pine Rick’s Wild Mushrooms. FINANCE Finance and Accounting Department

Processed all payables and receivables Completed annual PDA audit work with Peterson Sullivan Began working with State Auditor to schedule annual State Audit Working with Seattle City Light to review rates and service levels for the Market Recieved a clean, unqualified opinion from Peterson Sullivan for the 2012 Audit

Finance Committee – Key Actions and Discussions

Reviewed May 2013 financials Reviewed and discussed invesment options for PDA reserves Discussed Seattle City Light rate increases and efforts to seek rate adjustments and

clarification Approved Resolution 13-41: Approval of the PDA Audit for the year ended 12/31/2012

MARKET PROGRAMS


Marketing

Promoted market businesses and activities via the website, Facebook, Twitter Prepared launch of updated Market website Prepared for launch of Summer Farm Season and Express Markets Hosted 32 non-PDA events in the Economy meeting rooms, including: Pearson Higher

Education, Model Moment, Slow Money NW, UW Osher Lifelong, Shine America and private birthday & graduation parties

Unveiled new Market specific shopping bag (AKA super bag) at Express Markets Farm and Daystall

Launched Express Markets at City Hall, South Lake Union and Pioneer Square Registered 242 performers year-to-date Held annual Daystall Appreciation Breakfast thanking Market farmers and artists

Market Programs Committee - Key Actions and Discussions

Reviewed Social Services Programs, 2013 Market Foundation grants and recommendations

Reviewed Trademark Usage Guidelines Reviewed Farm Program Consumer Research recommendations Reviewed and Approved Proposed Resolution 13-40: Update to Trademark Guidelines and Expansion of Federal Registration Reviewed and Approved Proposed Resolution 13-42: Authorization of Contract Authority for Farm Program Consumer Research

ASSET MANAGEMENT Residential

Continue to lease available units, Market-wide vacancy rate just under 4% Provided tour of Market residential for Beacon Housing Development Consultants Issued reminder notice to all residents regarding no-smoking in residential units and

buildings Commercial

Reviewed responses to Wayfinding RFP and drafted recommendation. Finalized plans for Rachel's Ginger Beer and facilitated begining of tenant

improvements

Worked with tenants in 1st and Pine to improve patron line managment Tenant improvement work ongoing for Storyville Coffee and Roberto’s Trattoria both are

expected to open mid-summer Worked with Marketing and tenants to finalize new Market wayfinding map

Capital Projects

Garage elevator modernization completed pending final inspection, inspection of 2nd elevator anticipated the last week of June.

Foodbank expansion completed – grand opening on Thursday, June 27th. Capital Needs Assessment and Reserve Study initial draft completed from SHKS. Fish floor re-surfacing to be completed the week of June 24th at night to minimize

impacts


Parking

Garage revenue through May was up 7% over budget projections. Revenue from the surface parking lots through May was up 4% over budget projections

Maintenance and Facilities

Conducted ongoing maintenance, painting, plumbing, and electrical work Total garbage tonnage – 173.5tons, 17.5 tons less then April 2012 Recycled 402 cubic yards mixed and 158 cubic yards of compost Fish-ice melting station handled 75.4 tons of ice in May

Security

Conducted routine patrols and responded to calls for service in the Market. Provided assistance and additional support for Arcade Lights Updated Market-wide emergency response plan Participated in two day JCTAWS (Joint Counterterrorism Awareness Workshop) with

local and regional law enforcement, first responders, FBI and DHS

Renovation

Submitted updated of Western Avenue window condition assessment and final application to MHC

Asset Management Committee - Key Actions and Discussion Reviewed parking & garage strategy and current operations Reviewed motorcycle parking options Reviwed programming for Economy Atrium Meeting Room and recommended

improvements Approved Proposed Resolution 13-39: Authorization for Contract – Atrium Loft and

Elliott Bay Room – Economy Atrium Audio and Visual Equipment Approved Proposed Resolution 13-38: Proposed Contract with Trade-Marx Sign & Display for Fabrication & Installation of Phase I Signage of the

Wayfinding Signage Project Approved Proposed Resolution 13-37: Lease Proposals - June 2013

WATERFRONT REDEVELOPMENT

Continued Schematic Design work with Miller Hull Reviewed project files, budgets and planning to-date with SOJ - Project Manager/Owner

Representative Identified solutions for direct access to new parking from new Alaskan/Elliott roadway Executed and recorded Cooperative Agreement with WSDOT, payment of $1 million

from WSDOT in process. Waterfront Redevelopment - Key Actions and Discussion

Reviewed Miller Hull schematic design work, refined retail layouts, updated renderings, view analysis and public space concepts

Reviewed housing options and heard recommendations from Beacon


Approved Housing option 3 - double loaded corridor and requested that staff prepare a resolution for Full Council

ADDITIONAL UPDATES AND ITEMS OF NOTE PDA Employee May Anniversaries:

28 yrs - Jeff Jarvis (Facilities) 21 yrs - Gar Massey (Facilities) 12 yrs - Lakesha Brown, Ron Taulung (Security) 11 yrs - Lorne Hancheroff (Maintenance) 3 yrs - David Hinz (Facilities), James Cornell (Daystall) Jennifer Maietta (Commercial),

Paul Wade (Facilities)


Commercial Sales Comparison (thru April 2013)


Food

Mercantile


Restaurants


Section III


Section IV



PROPOSED RESOLUTION 13-37:

Lease Proposals

JUNE 2013

Tenant Term Start Date

Market Optical Five (5) Years June 1, 2013

Ruvane Richman

Pike Place Bags Five (5) Years June 1, 2013

Eugene & Ellen Kim

______________________________________ _______________________________

Gloria Skouge, Secretary/Treasurer Date

Date Approved by Council:

For:

Against:

Abstained:



LEASE SUMMARY

Date: 06/10/2013

Business Name/Owner: Market Optical / Ruvane Richman

Address/Building/Square feet: 1906 Pike Place #8 / Stewart / 1,582 sf

Tenant Since: Since 1982

Primary Term: Five (5) Years

Options: Five (5) Years

Use Description: Full service optical shop with eye exams

Business Name/Owner: Pike Place Bags / Eugenen & Ellen Kim

Address/Building/Square feet: 1501 Pike Place #421 / Fairley / 390 sf

Tenant Since: Since 1994

Primary Term: Five (5) Years

Options: N/A

Use Description: Bag store specializing in the sale of fabric

“non-leather” bags



PROPOSED RESOLUTION 13-41

Approval of 2012 Audited Financial Statements

JUNE 2013

BE IT RESOLVED that the PDA Council hereby approves the 2012 PDA financial statements, audited by

Peterson Sullivan LLP, Certified Public Accountants, covering the period beginning January 1, 2012

through December 31, 2012.

______________________________________ _______________________________



For:

Against:

Abstained:


Section V



PROPOSED RESOLUTION 13-38:

Proposed Contract with Trade-Marx Sign & Display for Fabrication & Installation of Phase I

Signage of the Wayfinding Signage Project

JUNE 2013

WHEREAS, Pike Place Market Preservation and Development Authority (“PPMPDA”) was chartered

by the City of Seattle pursuant to RCW 35.12.730 et. seq with the mission of

performing renewal, rehabilitation, preservation, restoration, development, and

nonprofit management of structures and open spaces in a manner that will initiate

programs to expand food retailing; to promote the survival and predominance of small

shops, marginal businesses, thrift shops, arts and crafts, other enterprises, activities and

services which are essential to the functioning of the Public Market; and

WHEREAS, The purpose of the wayfinding program is to implement design standards and graphics

for signage related to uniformity of color pallet, fonts, images, form and consistency of

look to define the perimeter of the Historic District; reflect and enhance the historic

and eclectic character of the Market; provide solutions for building identification, tenant

directories, access and amenity locations and street-level as well as vertical wayfinding;

and create a system of symbols than can assist international visitors with navigation; and

WHEREAS, RMB Vivid, Inc. has produced market-wide design standards and specifications that were

approved by the Pike Place Market PDA, PDA Council and Pike Place Market Historical

Commission ready for fabrication and installation; and

WHEREAS, The PPMPDA conducted a public process and issued a Request for Proposals (RFP) for

the fabrication and installation based upon the approve signage specifications for Phase I

of the wayfinding program in accordance with its Purchasing Guidelines and solicited

proposals from thirteen vendors, three proposals were received and based on the

content and quality of the proposals Trade-Marx Sign & Display was identified as the

vendor that best met the proposed guidelines (and was lowest total price); and

WHEREAS, The PPMPDA is ready to enter into a contract for with Trade-Marx Sign & Display in an

amount not to exceed $141,300; inclusive of the formal bid amount plus estimated

Washington State Sales Tax, permit fees and contingency for fabrication and installation

services.

NOW THEREFORE, BE IT RESOLVED that he Pike Place Market PDA Council authorizes the PDA to

enter into a contract with Trade-Marx Sign & Display for fabrication and design services in an amount not

to exceed $141,300 to be paid from Capital Projects.

______________________________________ _______________________________



For:

Opposed:

Abstained:



Proposed Resolution 13-39

Authorization for Contract Authority – Atrium Loft and Elliott Bay Room – Economy

Atrium Audio and Visual Equipment

June 2013

WHEREAS, the Pike Place Market Preservation and Development Authority (PPMPDA) was

chartered by the City of Seattle pursuant to RCW 35.21.730 et. Seq with the mission of

promoting enterprises essential to the functioning of the Pike Place Market, including

the preservation and expansion of the low-income residential community, the

promotion and survival of small businesses , and the expansion of services to the public

market and community; and,

WHEREAS, in order to maintain the viability of the Pike Place Market buildings the PPMPDA has

determined that installation of a professional grade audio/visual system is necessary for

the conference meeting rooms to effectively function as spaces for programs and events;

WHEREAS, the PPMPDA has executed a competitive bid process for installing a new sound and

video system in the Atrium Loft and Elliott Bay conference rooms;

BE IT RESOLVED that the PPMPDA Council authorizes the PPMPDA Executive Director or his designee

to enter into a contract with Guitar Center Professional in an amount not to

exceed $19,000.44 for the execution of adding audio and visual equipment to the

Atrium Loft and Elliot Bay conference rooms.

$10,000 for this project will be drawn from the Capital Projects Budget, Economy

Atrium Event Improvements, Accounting Code 163730-00, and the remaining

$9,000.44 will be drawn from the Capital Inventory, Accounting Code 160170-

00.

______________________________________ _______________________________



For:

Against:

Abstained:



PROPOSED RESOLUTION: 13-40

Update to Trademark Policies and Expansion of Federal Registrations

June 2013

WHEREAS, the Pike Place Market Preservation and Development Authority (PDA) is the owner of

all rights, title, and interest in and to certain trademarks and graphical representations of

the Pike Place Market name and trademark; and,

WHEREAS, the trademarks include those listed in Attachment A; and,

WHEREAS, the PDA licenses other parties to use these trademarks for uses that will enhance the

image of the Pike Place Market as defined by the Market’s Charter; and,

WHEREAS, the primary purposes for granting licenses for the above referenced trademarks is:

1. to enhance the image of the Pike Place Market as defined in the Market’s Charter

2. to cultivate shoppers and promote retail sales for Market merchants

3. to further the public appreciation of the traditional character, purposes, and

products of the Market; and,

WHEREAS, the issuance of non-exclusive license agreements meets certain general conditions

including:

1. the proposed licensed use is consistent with all the primary purposes listed above

2. the licensed use does not infringe upon licenses already granted, nor does it create

confusion in the mind of the consumer, based on interpretation by the PDA

3. the licensed use materially benefits and improves the Market community by

producing revenues not otherwise available through normal Market resources; and,

WHEREAS, licensing partners agree to use the licensed name and trademark only in a way that will

reflect positively on the Pike Place Market; and,

WHEREAS, the PDA pursues enforcement against those infringing on our trademark rights to cease

using them in order to protect our trademark rights and the integrity of our marks; and,

WHEREAS, active licensing of products in various categories strengthens the PDA’s ability to pursue

enforcement of trademark infringement,

NOW, THEREFORE, BE IT RESOLVED that the PDA Council will add the following to the general

conditions of issuance of non-exclusive license agreements:

1. The licensed product is consistent with the use permits granted by the Pike Place Market

Historical Commission for merchandise sold within the Market.

2. All products using Market trademarks are manufactured in compliance with the Prohibition

of Sweatshop Conditions and free of hazardous materials. Upon request, applicant will PDA Council Packet 06.27.13

disclose the names and locations of factories, and information about wages and working

conditions, for all products using Market trademarks.

______________________________________ _______________________________



For:

Opposed:

Abstained:



PROPOSED RESOLUTION: 13-42

Authorization for Contract Authority for Farmers Market Consumer Research

June 2013

WHEREAS, the Pike Place Market Preservation and Development Authority (PDA) has identified the

growth and development of the Farm Program as a strategic priority; and,

WHEREAS, increasing profitability for small and mid-sized farmers who sell at the Market is a critical

component of the development of this program; and,

WHEREAS, the PDA may consider developing a new Consumer Supported Agriculture (CSA)

program as part of an overall aggregation strategy; and,

WHEREAS, the PDA has not, to date, conducted detailed research into consumer attitudes and

behaviors regarding shopping at the farm stalls or purchasing membership in a CSA; and,

WHEREAS, quantitative and qualitative analysis of consumer attitudes and behaviors can help ensure

the success of future promotions and program development;

THEREFORE BE IT RESOLVED that the PDA Council authorizes the PDA Executive Director or his

designee to enter into a contract with PRR in an amount not to exceed $21,150 for the execution of

qualitative and quantitative research to help increase customer demand for the Farm Program. Funding for

this project will be drawn from Community Events and Programs, Farm Hub Market Research Accounting

Code 488666-00.

______________________________________ _______________________________



For:

Opposed:

Abstained:


Section VI



WATERFRONT REDEVELOPMENT COMMITTEE (WRC)

Meeting Minutes

Tuesday June 4th, 2013

5:00 p.m. to 6:00 p.m.

Elliott Bay Room

Committee Members Present: Gloria Skouge, Patrick Kerr, Matt Hanna, John Finke

Other Council Members Present: David Ghoddousi, Jim Savitt

Staff Present: Ben Franz-Knight, Lillian Hochstein, Dianna Goodsell

Others Present: David Miller, Brian Court, Grace Leong, Howard Aller, Bob Messina, Joan Paulson

The meeting was called to order at 5:04pm by Gloria Skouge, Vice-Chair.

I. Administrative


The agenda was approved by acclamation.

B. Approval of the May 16th, 2013 Minutes

The minutes were approved by acclamation.

II. Announcements and/or Community Comments

Ben Franz-Knight gave a brief update regarding the selected partners for the PC-1North Project

Management Services and PC-1 North Low Income Housing Finance Consultant Services. He noted that

both “Shiels Obletz Johnsen and Beacon Development Group” will be fully engaged by next Monday and

that he is looking forward with working with them on the project.

III. Key Issues and Discussion Items

A. Schematic Design Update

David Miller provided an update on the PC-1 North Schematic Design progress. He noted that the team is

almost completed with roughly fifty percent of the Schematic Design work. He provided a brief overview

on recent meetings regarding PC-1 North including general loading requirements for commercial and

business needs for the site. David Miller and Brian Court gave a presentation on the PC-1 North Schematic

Design update which was also included with the meeting minute’s record.

i. Housing Massing and View Analysis

The Miller Hull team reviewed Housing Massing options for PC-1 North including a view analysis for the

options. The housing options presented included Housing Option 1, which was the previous option noted in

the BB+ design. Housing Option 1 would be considered more livable with the highest Gross Square Footage

but would be at a higher cost to build; there would be roughly 36 available residential units in this option.

Housing Option 2 would be similar to Housing Option 1 but would include an increase in the density of the

space and overall higher Net Rentable Square Footage; there would be roughly 48 residential units in this



option. Housing Option 3 would be the most efficient option with a standard double loaded corridor, space

for 40 residential units and the least Net Rentable Square Footage.

David Miller noted we are looking at getting a master use permit in the next few weeks so decisions would

need to be made regarding the designs.

John Finke noted that he likes the concept of the live-work housing design option; he mentioned that this

design option would most likely need to be funded from a different source other than low- income housing

funds.

Brian Court noted that the current housing design option was redesigned to be a foot higher from the

original concept design to make room for the elevator overrun with keeping in mind of the view

preservation.

There was a brief discussion regarding the height of the building for the housing design options for PC-1

North.

Jim Savitt noted that the Full Council and public would need to approve of the proposed foot increase in the

housing design option.

John Finke noted that we need to know the likelihood of financing the housing option; it may not matter

about the height of the building until we know how likely we can fund the housing portion.

Matt Hanna inquired about Seneca Group preparing an analysis on housing cost estimates for PC-1 North.

ii. Commercial Floor plate and ADA route design

There was an overview from Miller Hull regarding the Commercial Floor plate and ADA route design in the

Schematic Design update presentation. There were several illustrations in the presentation which included

the Commercial Plan Study, Commercial Tenant Improvements Study and example of an Interiors Concept

for the site. There was a brief discussion on the concept of a sky duct for mechanical exhaust venting for

the commercial area; the venting would be important for flexibility of the various commercial spaces and

assistance with seasonal weather protection.

There was a brief update on the details on the ramping with the PC-1 North site. Miller Hull reported that

they have been working with an ADA consultant on overall circulation and ADA accessibility in PC-1 North.

iii. Rooftop Program and Design Update

There was a brief update on the Rooftop Program and Design Update in conjunction with Miller Hull and

Berger Partnership. It was noted that the team is brainstorming on conceptual ways regarding design for the

various spaces including circulation, green designated areas and landscaping. An illustration was included

with the presentation of the Schematic Design Update.

IV. Reports and Action Items

A. Report from Stakeholders Group

None

V. Resolution(s) to be Added to Consent Agenda

None

VI. Public Comment

Howard Aller commented on the residential building design and reminded the Committee and Architects

about ensuring that the entrances and corridors for the residential units do not open directly to the public

and street.

Joan Paulson commented on the recent public meeting from May 16th, 2013. She noted her concern with

the written responses in regards to the Pike Place Market PDA Report responding to public comments

received on the written analysis and summary for the PC-1 North Redevelopment and WSDOT Parking

Mitigation Agreement. She noted that the public matter of answering questions received in regards to the



written analysis was not responded to in a definitive manner. She lastly mentioned that the book written

from Author Goodwin, Markets: Public and Private still needs to be looked over thoroughly in regards to

designing the PC-1 North Project.

Bob Messina noted that he was having difficulty conceptualizing a southern walkthrough in the design; he

would like that item expressed in future drawings in terms of pedestrian walkways.

VII. Concerns of Committee Members

None

VIII. Adjournment

The meeting was adjourned at 5:55 p.m. by Gloria Skouge, Vice-Chair

Meeting minutes submitted by: Dianna Goodsell, Administrative Services Coordinator



ASSET MANAGEMENT COMMITTEE

Draft Meeting Minutes

Monday June 10th, 2013

4:30 p.m. to 6:00 p.m.

Elliott Bay Room

Committee Members Present: Patrick Kerr, David Ghoddousi, Betty Halfon

Other Council Members Present: Gloria Skouge

Staff Present: Ben Franz-Knight, John Turnbull, Tamra Nisly, Jennifer Maietta, Brady Morrison, Matt

Holland, Kelly Lindsay, Teri Wheeler, Steve Nelson, Kelly Forbes-Marshall, Ross O’Brien, James

Drew Daly, Dianna Goodsell

Others Present: Joshua Anderson, Howard Aller

The meeting was called to order at 4:30 p.m. by Patrick Kerr, Chair

I. Administration

A. Approval of the Agenda.

The agenda was approved by acclamation

B. Approval of the May 13th, 2013 Minutes


II. Announcements and Community Comments

None

Ben Franz-Knight entered in at 4:31p.m.

III. Levy Phase III Update

A. Update on Windows on Western

Tamra Nisly reported a brief update on the Windows on Western. She noted that the original application

for the Market Historical Commission was updated and submitted to Heather McCluffie for review; they

anticipate hearing back to have the application placed on the MHC agenda soon.

IV. Key Issues & Discussion Items

A. Parking & Garage Strategy Update

Tamra Nisly gave a presentation on the Parking & Garage Strategy Update. A copy of the presentation

was included with the meeting minute’s record. Tamra ‘s overview of the Parking and Garage Strategy

update included; Garage Revenue versus Resource, 2010 Parking Analysis, Marketing, Broader Strategy

and Stall Alignment.



Kelly Lindsay noted that the new Market tote included a message regarding parking at the Market at the

bottom of the bag.

Ben Franz-Knight concluded that overall the parking garage is preforming pretty well, noting that the

landscape of the market would change in the next few years. The recommendation was have the interior

of the garage restriped and maintaining the garage and parking operations like it is currently being

manages. He noted that the next phase of signage in the Market would be wayfinding for parking; he could

bring back a simple resolution regarding this and talk to the MHC about the alignment of striping

We fill that the garage is performing pretty well at the moment- giving the landscape of the market will

change in the next few years

The plan is revisiting the stripping plan in the interior of the garage. Really continue to maintain the garage

and parking operations as the way it is, emphasizing market promoting. The next phase is wayfinding

signage for parking. Bring it forward in a simple resolution- no recommendation of dramatic changes.

Bring it back next month. Come back next month talk to MH about the alignment of stripes.


B. Motorcycle Briefing

Tamra Nisly gave a brief update on motorcycle parking in the Market. She presented the Committee with

an overview of the current parking issue with motorcycles in the Market. She provided two options to

the Committee which included; Option A, Parking Garage Permit and Option B, Do not make a change in

the current parking arrangements.

There was a brief discussion that followed

Patrick Kerr noted that there should be an option C in which we would stripe the parking spots and

install a money box at the existing location.

David Ghoddousi noted that motorcyclists pay in the Seattle area but somehow not in the Market. He

agreed with Patrick that there should be a payment box installed at the existing location with the parking

spots striped.

Ben Franz-Knight noted as operational reason of installing a money box; we could issue parking permits

and stripe the area. He added that we could have a sign made and the only recourse is that we would

need to tow the cars since it is in SDOT’s purview.

Betty Halfon noted that we should check with our insurance policy regarding motorcycle parking.

The next steps would be to move forward with creating a motorcycle permit process and placement of

signage to enforce the motorcycle parking,

C. Programming for Economy Atrium Meeting Room Improvements

Kelly Lindsay gave a brief presentation on the Atrium Meeting Room Improvements. A copy of the

presentation was included with the meeting minute’s record. The objective for the Atrium Meeting Room

Improvements was summarized as follows:

Meeting Space

Primary use for community meetings and auxiliary space for other Market-related functions.

Make spaces available at other times, primarily weekends, for revenue-generating events such as

conferences, weddings, meetings, and receptions

Flexible spaces in the vicinity of the Market are unmatched and will provide new events and

customers.

After the initial capital outlay, these spaces will provide a long term, sustainable revenue stream

to the Market.



Kelly noted that basic room improvements included; tables, chairs, lighting, drapery, A/V equipment,

acoustic panels and room furnishings.


i. Action Item: Proposed Resolution 13-39: Authorization for Contract Authority - Atrium Loft and

Elliott Bay Room - Economy Atrium Audio and Visual Equipment

Ben Franz-Knight introduced the resolution which states that the Pike Place Market Preservation and

Development Authority (PPMPDA) was chartered by the City of Seattle pursuant to RCW 35.21.730 et.

Seq with the mission of promoting enterprises essential to the functioning of the Pike Place Market,

including the preservation and expansion of the low-income residential community, the promotion and

survival of small businesses , and the expansion of services to the public market and community; and,

WHEREAS, in order to maintain the viability of the Pike Place Market buildings the PPMPDA has

determined that installation of a professional grade audio/visual system is necessary for the conference

meeting rooms to effectively function as spaces for programs and events; WHEREAS, the PPMPDA has

executed a competitive bid process for installing a new sound and video system in the Atrium Loft and

Elliot Bay conference rooms;

BE IT RESOLVED that the PPMPDA Council authorizes the PPMPDA Executive Director or his designee

to enter into a contract with Guitar Center Professional in an amount not to exceed $19,000.44 for the

execution of adding audio and visual equipment to the Atrium Loft and Elliot Bay conference rooms.

$10,000 for this project will be drawn from the Capital Projects Budget, Economy Atrium Event

Improvements, Accounting Code 163730-00, and the remaining $9,000.44 will be drawn from the Capital

Inventory, Accounting Code 160170-00.

David Ghoddousi moved, Betty Halfon seconded


Patrick Kerr inquired about the future revenue of the event spaces and at what time will we start

generating revenue.

For: David Ghoddousi, Betty Halfon, Patrick Kerr

Against: 0

Abstain: 0

Resolution 13-39 passed unanimously

ii. Atrium Kitchen Update

There was a brief update from John Turnbull regarding the Atrium Kitchen. He passed out design for the

Atrium Kitchen and noted that there would be a final resolution next month for the kitchen at the

Finance meeting and Full Council meeting due to the timing of the procurement process.

D. North Arcade Slabs

Ben Franz-Knight provided an update on the North Arcade Slabs and the concerns over the safety of the

slabs. He noted that the issue of people getting hurt from the slabs was raised under public comment at

the previous full council meeting.

This issue was raised under public comment. A year ago we went through a pretty extensive review

process of what we could do with the slabs. The MHC was not in favor of changes. We do have some

options - gentle reminder. We could also place stricter guidelines to attach some equipment- physical

changes to the slabs are going to be very difficult.

V. Action Item(s)

A. Action Item: Proposed Resolution 13-38: Proposed Contract with Trade-Marx Sign & Display for

Fabrication & Installation of Phase I Signage of the Wayfinding Signage Project



Jennifer Maietta introduced the resolution which states that the Pike Place Market Preservation and

Development Authority (“PPMPDA”) was chartered by the City of Seattle pursuant to RCW 35.12.730

et. seq with the mission of performing renewal, rehabilitation, preservation, restoration, development, and

nonprofit management of structures and open spaces in a manner that will initiate programs to expand

food retailing; to promote the survival and predominance of small shops, marginal businesses, thrift shops,

arts and crafts, other enterprises, activities and services which are essential to the functioning of the

Public Market; and WHEREAS, The purpose of the wayfinding program is to implement design standards

and graphics for signage related to uniformity of color pallet, fonts, images, form and consistency of look

to define the perimeter of the Historic District; reflect and enhance the historic and eclectic character of

the Market; provide solutions for building identification, tenant directories, access and amenity locations

and street-level as well as vertical wayfinding; and create a system of symbols than can assist international

visitors with navigation; and WHEREAS, RMB Vivid, Inc. has produced market-wide design standards and

specifications that were approved by the Pike Place Market PDA, PDA Council and Pike Place Market

Historical Commission ready for fabrication and installation; and WHEREAS, The PPMPDA conducted a

public process and issued a Request for Proposals (RFP) for the fabrication and installation based upon the

approve signage specifications for Phase I of the wayfinding program in accordance with its Purchasing

Guidelines and solicited proposals from thirteen vendors, three proposals were received and based on

the content and quality of the proposals Trade-Marx Sign & Display was identified as the vendor that best

met the proposed guidelines (and was lowest total price); and WHEREAS, The PPMPDA is ready to enter

into a contract for with Trade-Marx Sign & Display in an amount not to exceed $141,300; inclusive of the

formal bid amount plus estimated Washington State Sales Tax, permit fees and contingency for fabrication

and installation services.

NOW THEREFORE, BE IT RESOLVED that he Pike Place Market PDA Council authorizes the PDA to

enter into a contract with Trade-Marx Sign & Display for fabrication and design services in an amount not

to exceed $141,300 to be paid from Capital Projects.

David Ghoddousi moved, Betty Haflon seconded


David Ghoddousi noted that it would be nice to see visuals of the signage to be installed in the Market He

would like to see at full council some representations of what is proposed including pictures and locations

of the signs.

Betty Halfon inquired about the anticipation date of the fabrication and installation of the signs in the

Market.


Against: 0

Abstain: 0

Proposed Resolution 13-38 passed unanimously

VI. Public Comment

None

VII. Property Management

A. Residential Property Management Report

John Turnbull briefly discussed the Residential Property Management Report. He noted that we are

tracking right on budget in regard to vacancies at 4%. He added that Residential Managers are working on

trying to decrease the turnover time with the residential units. He further added that we are passing all of

the inspections that come our way. He lastly noted that the new Market House Residential Manager,

Larry Mason is doing great job.

Closed Session started at 5:45p.m.

B. Closed Session (RCW 42.30.110 [c])



I. Review of Lease Proposals

II. Lease Renewal - Market Optical - 1906 Pike Place #8

Lease Renewal - Pike Place Bags - 1501 Pike Place #421

III. Review of Delinquency Report

a. Vacancy Report b. Current Lease Negotiations

Closed Session ended at 6:00p.m.

C. Open Session: Approval of Lease Proposals

Open Session started at 6:01p.m

D. Action Item: Proposed Resolution 13-37: Lease Proposals - June 2013

Jennifer Maietta introduced the resolution which states the Lease Proposals for June 2013 below:

Market Optical Five (5) Years June 1, 2013

Ruvane Richman

Pike Place Bags Five (5) Years June 1, 2013

Eugene & Ellen Kim

Betty Halfon moved, David Ghoddousi seconded


Against: 0

Abstain: 0

Resolution 13-37 passed with a vote 2-0-1

VIII. Items for the Consent Agenda

Resolution 13-37 was moved to the consent agenda.

IX. Concerns of Committee Members

None

i. X. Adjournment

The meeting was adjourned at 6:02p.m. by Patrick Kerr, Chair




MARKET PROGRAMS COMMITTEE


Thursday, June 13th, 2013

4:00 p.m. to 6:00 p.m.

Elliott Bay Room

Committee Members Present: Bruce Burger, Gloria Skouge, Ann Magnano, Betty Halfon

Other Council Members Present: David Ghoddousi, Patrice Barrentine

Staff Present: Ben Franz-Knight, Kelly Lindsay, Sue Gilbert Mooers, Emily Crawford, Scott Davies,

Lillian Hochstein, Dianna Goodsell

Others Present:

The meeting was called to order at 4:01p.m. by Bruce Burger, Chair.

I. Administration


The agenda was approved by Acclamation

B. Approval of the May 9th, 2013 Meeting Minutes.

The minutes were approved by Acclamation


None

III. Programs and Marketing Director’s Report

A. Programs & Promotions Update

Kelly Lindsay presented the Programs and Marketing Directors Report. She provided several brief updates

on the monthly metrics. She noted the status of the farmland resolution passed out last month regarding

partnership with the City and County for farmland preservation opportunities. She noted that status on

the Tall Chief Property; Sally and Tom are still interested in purchasing the property and doing a licensing

agreement with a CSA. She lastly noted that we are on track to launch the updated website in June and

that the Express markets are starting next week.

B. Summer Farm Season Promotion

Kelly Lindsay gave a presentation on the Summer Farm Season Promotion. A copy of the presentation

was included with the meeting minute’s record. Kelly discussed the program goals, tactics and

measurements for the 2013 Farm Season Marketing. A summary of the presentation is as follows:

Programs Goals

Increase revenue to farmers and other merchants by focusing on the following;


Place PPM in front of consumers of local, farm fresh, authentically and sustainably produced food

and farm

Increase utilization of food assistance programs - SNAP, WIC, Senior FMNP - at farm stalls

Educate customers on the selection, storage and use of seasonal produce.

Promote the Market as a regular, year-round shopping destination for downtown residents and

workers.

Tactics

Out to Lunch Concert Series - July 12 to 9/20

Pike Place Market “Neighborhood guide” -7/12 to 8/30

Pike Place Market Tote

SNAP Matching/Nutrition Programs

Various forms of advertisements including posters, online advertising, media and blogger

outreach and weekly email updates.

Measurements

Daily sales for farmers at all Market locations. Total, daily average and year over year.

Schedule for distribution of “Neighborhood Guides” through all outlets.

Sales of Market produce bags at OTTL Concerts

Coupon redemption rates. Total, %and YOY.

Customer attendance at Express Markets. (First time tracking)

Media placements and social media engagement.

Additional exposure through paid media or partnerships.


IV. Presentations and Discussion

A. Social Services Program Review and Recommendations

Lillian Hochstein, the Market Foundation Executive Director gave an overview of the Social Services

Program Review and Recommendations. She presented several highlights including the work of the VISTA

volunteers and ongoing projects in the Market. She presented a summary of the recent Cut the Pie

Celebration for the Market Foundation which granted $740,500 to vital services in the Market.


Bruce Burger inquired about specific needs for the Market Foundation and Social Services review. He

mentioned about the rationale of the rents charged to the various social services agencies.

B. Trademark Usage Guidelines

Kelly Lindsay gave a report on the Trademark Usage Guidelines. A copy of the Trademark Usage

Guidelines was included with the meeting minute’s record. Kelly gave an overview on the goals, current

Federal Trademarks and Categories, Licensing Guidelines, and Additional Trademark Protection in

regards to the Trademark Usage Guidelines. Kelly noted that under the current Licensing Guidelines

there was proposed additional language which included;

1. The licensed product is consistent with the use permits granted by the Pike Place Market

Historical Commission for merchandise sold within the Market.

2. All products using the Market trademarks are manufactured in compliance with the Prohibition

of Sweatshop Conditions (Exhibit C) and free of hazardous materials. Upon request, applicant

will disclose the names and locations of factories, and information about wages and working

conditions, for all products using Market trademarks.


C. Farm Program Consumer Research


Kelly Lindsay gave a presentation regarding the 2013 Farm Program Consumer Research. She discussed

the Farm and Food Program Goals for 2013 and beyond which included; enhancing farmer profitability,

increasing famer participation in the Market and increasing customer base to support farmers. She

discussed the research goals and audience for the farm program consumer research. She lastly reviewed a

general timeline for the program pending Council approval with Proposed Resolution 13-42.


Betty Halfon noted the importance of including participants from various social and economic groups.

Ann Magnano noted that she would like to see this resolution passed. She noted that this Market research

is an investment for our farmers.

Betty Halfon noted that many customers do not know the difference between the high stalls and farm

stalls and that education has to start with the customer.

Patrice Barrentine inquired if the survey questions were going to be made available to the council

members to review.

V. Action Items

A. Action Item: Proposed Resolution 13-40: Update to Trademark Guidelines and Expansion of Federal

Registration

Ben Franz-Knight introduced the resolution which states the Pike Place Market Preservation and

Development Authority (PDA) is the owner of all rights, title, and interest in and to certain trademarks

and graphical representations of the Pike Place Market name and trademark; and,

WHEREAS, the trademarks include those listed in Attachment A; and,

WHEREAS, the PDA licenses other parties to use these trademarks for uses that will enhance the

image of the Pike Place Market as defined by the Market’s Charter; and,

WHEREAS, the primary purposes for granting licenses for the above referenced trademarks is:

1. to enhance the image of the Pike Place Market as defined in the Market’s Charter

2. to cultivate shoppers and promote retail sales for Market merchants

3. to further the public appreciation of the traditional character, purposes, and

products of the Market; and,

WHEREAS, the issuance of non-exclusive license agreements meets certain general conditions

including:

1. the proposed licensed use is consistent with all the primary purposes listed above

2. the licensed use does not infringe upon licenses already granted, nor does it create

confusion in the mind of the consumer, based on interpretation by the PDA

3. the licensed use materially benefits and improves the Market community by

producing revenues not otherwise available through normal Market resources; and,

WHEREAS, licensing partners agree to use the licensed name and trademark only in a way that will

reflect positively on the Pike Place Market; and, WHEREAS, the PDA pursues

enforcement against those infringing on our trademark rights to cease using them in

order to protect our trademark rights and the integrity of our marks; and, WHEREAS,

active licensing of products in various categories strengthens the PDA’s ability to pursue

enforcement of trademark infringement,

NOW, THEREFORE, BE IT RESOLVED that the PDA Council will add the following to the general

conditions of issuance of non-exclusive license agreements:


1. The licensed product is consistent with the use permits granted by the Pike Place

Market Historical Commission for merchandise sold within the Market.

2. All products using Market trademarks are manufactured in compliance with the

Prohibition of Sweatshop Conditions and free of hazardous materials. Upon request,

applicant will disclose the names and locations of factories, and information about wages

and working conditions, for all products using Market trademarks.

Ann Magnano moved, Betty Halfon seconded

There was a discussion that followed.

For: Ann Magnano, Gloria Skouge, Bruce Burger, Betty Halfon

Against: 0

Abstain: 0


B. Action Item: Proposed Resolution 13-42: Authorization of Contract Authority for Farm Program

Consumer Research

Kelly Lindsay introduced the resolution which states that the Pike Place Market Preservation and

Development Authority (PDA) has identified the growth and development of the Farm Program as a

strategic priority; and, WHEREAS, increasing profitability for small and mid-sized farmers who sell at the

Market is a critical component of the development of this program; and, WHEREAS, the PDA may

consider developing a new Consumer Supported Agriculture (CSA) program as part of an overall

aggregation strategy; and, WHEREAS, the PDA has not, to date, conducted detailed research into

consumer attitudes and behaviors regarding shopping at the farm stalls or purchasing membership in a

CSA; and, WHEREAS, quantitative and qualitative analysis of consumer attitudes and behaviors can help

ensure the success of future promotions and program development; THEREFORE BE IT RESOLVED that

the PDA Council authorizes the PDA Executive Director or his designee to enter into a contract with

PRR in an amount not to exceed $21,150 for the execution of qualitative and quantitative research to

help increase customer demand for the Farm Program. Funding for this project will be drawn from

Community Events and Programs, Farm Hub Market Research Accounting Code 488666-00.

Ann Magnano moved, Gloria Skouge seconded

For: Ann Magnano, Gloria Skouge, Bruce Burger, Betty Halfon,

Against: 0

Abstain: 0


VI. Items for the Consent Agenda

Resolutions 13-40 and 13-42 were placed on the Consent Agenda

VII. Concerns of Committee Members

Gloria Skouge formally welcomed Patrice Barrentine to the Committee meeting.

VIII. Public Comment

None

IX. Adjournment

The meeting was adjourned at 5:40 pm by Bruce Burger, Chair


FINANCE COMMITTEE


Tuesday June 18th, 2013

4:30 p.m. to 6:00 p.m.

Goodwin Library

Committee Members Present: Matt Hanna, Gloria Skouge, Ann Magnano, David Ghoddousi

Other Council Members Present:

Staff Present: Ben Franz-Knight, Sabina Proto, Jay Schalow, John Turnbull, Dianna Goodsell

Others Present: Matt Smith, Keaton Wersen

The meeting was called to order at 4:32p.m. by Matt Hanna, Chair

I. Administrative


The agenda was approved by acclamation.

B. Approval of the May 21st, 2013 Minutes



None

III. Discussion about Increase on Electricity Charges

This item was presented after the presentation of the Pike Place Market PDA Audit for the year ended

December 31, 2012.

Ben Franz- Knight reported the Seattle Light City Representative would be in attendance at the July Finance

Committee meeting regarding the discussion about the increase on Electricity Charges in the Market. He

noted that he has had a good conversation already with Seattle City Light regarding the concern over the

great increase in the Market’s electricity charges.

There was a discussion that followed regarding the recent and future conversations with Seattle City Light

and remedying the situation over the increased electricity rate charges.

Matt Hanna noted that it could be productive to involve individual PDA Council members to meet with

Seattle City Light as well as Electrical Engineers who help assist with installation of the new meters during

renovation.

David Ghoddousi noted that our rate should be less since the Market consolidated all of our meters an

updated our systems. He noted that the decision to upgrade and consolidate the meters was made prior to

Ben Franz-Knight and John Turnbull’s employment with the PDA.



Sabina Proto noted that Seattle City Light has also changed the methodology for the calculation of

downtown area charges.

There was a graph distributed noting the changes in Kilowatt cost by each of the Markets buildings. A copy

of the chart was included with the meeting minute’s record.

Ann Magnano entered in at 4:36pm.

IV. Presentation of the Pike Place Market PDA Audit for the year ended December 31, 2012

There was a presentation from Matt Smith and Keaton Werson from Perterson Sullivan regarding the Pike

Place Market PDA Audit for the year ended December 31, 2012. A copy of the presentation was included

with the meeting minute’s record. Matt Smith gave an overview of the Audit process for this year and

explanation of their Final Audit Report included with the Finance Committee meeting Packet.

Matt noted overall the Audit came back clean with zero adjustments which is excellent.

V. Review of the Financial Statements for May 2013

A. PDA Operating Statements

Sabina Proto gave a brief overview of the Financial Statements for May. The following content was included

with the Financial Statements for March 2013. Under Current Assets the prepayment of the Property

Insurance was one of the largest payments for the month of May. Designated Cash decreased due to

budgeted capital expenditures and spending’s out of the PDA funds. Restricted Cash decreased because of

the payment of the semiannual portion of the interest to the PC- 1 Bondholders. Fixed Assets increased

because of the work performed in different capital projects. Under the Accounts Receivable Activity Report,

the accounts receivables increased slightly in May. The increase on the Daystall Receivable was caused by

higher rates and attendance related to the Season.

Ben Franz-Knight entered in at 5:17pm.

Under the PDA Operating Statement, the Total Revenue for the end of May 2013 was $6,083,484 or over

budget by $262,086. The Total Operating Expense was $4,439,045 or under budget by $138,919. The Net

Operating Result for May was $1,644,439, which was $401,005 over budget. Under the Net Result after

Debt Service & Reserves, the Annual Budget was $1,884,836 and for the end of May the actual amount was

$593,916.

Footnotes on the Operating Expenses noted he following: Commercial Revenue was over budget; Base Rent

by $13,198 and Percent Rent by $104,478. Residential Revenue was over budget overall, because of the

shortage on the payment from HUD for Pine Residential; other than that the vacancy rate has been lower

than anticipated. Daystall Revenue was over budget; the Arcade Lights event generated higher revenue from

what was anticipated. Surface Revenue was over budget by $5,775 (net of City Share), Garage Revenue was

also over budget by $47,427 and Miscellaneous Revenue was over budget in May with Filming and

Trademark. Operating Expenses were over budget in departments including; Daystall, Surface Lots, and

Community Events. Sabina reported under the Percent Rent spreadsheet that Percent Rent was $104,478

over budget as compared to the same period as of last year.

IV. Checking Account Activity Report

The Checking Account Activity Report was distributed to Dianna Goodsell, Administrative Services

Coordinator.

V. Other Reports

A. Action Item: Proposed Resolution 13-41: Approval of the PDA Audit for the year ended 12/31/2012

Sabina Proto introduced the resolution which states that the resolution states that the PDA Council hereby

approves to pay Market Foundation a Management Fee in the amount of $11,460 for their services

David Ghoddousi moved, Ann Magnano seconded

For: Ann Magnano, Gloria Skouge, Matt Hanna, David Ghoddousi



Against: 0

Abstain: 0


B. Budgetary Review of Proposed Spending Resolutions

There was a brief budgetary review of Proposed Spending Resolutions 13-38 Proposed Contract with

Trade-Marx Sign & Display for Fabrication & Installation of Phase I Signage of the Wayfinding Signage

Project, 13-39 Authorization for Contract Authority – Atrium Loft and Elliot Bay Room – Economy Atrium

Audio and Visual Equipment and Proposed Resolution 13-42 Authorization for Contract Authority for

Farmers Market Consumer Research. Ben Franz-Knight noted that all of the resolutions passed unanimously

out of the Asset Management Committee and Market Programs Committee.

C. Exploration of Investment Options

Sabina Proto gave an overview of potential investment options for the Pike Place Market PDA. She provided

a brief synopsis of preliminary options provided from two investment services which included RBC Wealth

Management and Homestreet Bank investment services. She noted we currently are receiving less than 1%

annual return on our portfolio of the 12 million invested. She noted that our objective with exploring

investment options is to protect the PDA’s capital while improving our return. The two investment options

she briefly overviewed had significantly greater annual yields with greater annual estimated income for the

PDA.

There was a brief discussion over investment options for the PDA.

Matt Hanna inquired about the Capital Assessment Study in regards to thinking about investment options

for the PDA. He noted it would be good to know the results of our Capital Investment Study before

knowing how much we can invest. He mentioned thinking about who would be the best partner for the

PDA in terms of providing investment and financial services.

VII. Items for the Consent Agenda

Resolution 13-41 was moved to the Consent Agenda.

VIII. Public Comment

None

IX. Concerns of Committee Members

None

X. Adjournment

The meeting was adjourned at 6:03 p.m. by Matt Hanna, Chair

Meeting minutes submitted by:

Dianna Goodsell, Administrative Services Coordinator


Section VII


065200fs123112 Revised: 5/16/2013 1:45 PM mrb

PIKE PLACE MARKET PRESERVATION

AND DEVELOPMENT AUTHORITY

FINANCIAL REPORT

DECEMBER 31, 2012


065200fs123112 Revised: 5/16/2013 1:45 PM mrb

C O N T E N T S

Page

MANAGEMENT'S DISCUSSION AND ANALYSIS ...................................................................................... 1 - 6

INDEPENDENT AUDITORS' REPORT .................................................................................................... 7 and 8

FINANCIAL STATEMENTS

STATEMENT OF NET POSITION ......................................................................................................................................................................... 9

STATEMENT OF REVENUE, EXPENSES, AND CHANGES IN NET POSITION ...................................................................................10

STATEMENT OF CASH FLOWS .......................................................................................................................................................... 11 and 12

NOTES TO FINANCIAL STATEMENTS .................................................................................................................................................. 13 - 30

SUPPLEMENTARY INFORMATION

COMBINING STATEMENT OF REVENUE AND EXPENSES .....................................................................................................................32

SUPPLEMENTAL REPORT IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL

REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT

OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT

AUDITING STANDARDS .................................................................................................................... 34 and 35


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MANAGEMENT'S DISCUSSION AND ANALYSIS

We are pleased to present the Pike Place Market Preservation and Development Authority ("the PDA")

financial reports for the year ended December 31, 2012. This report was prepared by the PDA's finance

staff. The 2012 financial statements were audited by the public accounting firm of Peterson Sullivan LLP.

The information presented in this report is the responsibility of the management of the PDA. To the best

of our knowledge, the information presented is accurate in all material respects and is presented in a

manner designated to fairly state the financial position and results of operations of the PDA and includes

all necessary disclosures to present a complete understanding of the PDA's financial affairs.

Profile

The PDA is an independent public corporation created and chartered by the City of Seattle ("the City") in

1973 to own and operate the buildings and open spaces in the Pike Place Market Historic District ("the

District"). After a citizen's initiative in 1971 directed the City to create a Historic District in and around the

Pike Place Market ("the Market") and to rehabilitate the properties therein, the City purchased the majority

of properties in the District, rehabilitated these buildings, and transferred them to the PDA to operate in

accordance with the initiative directive and City charter. The PDA owns approximately 80% of the property

in the District. The PDA is not a component of the City and the City is not financially accountable for the

operations of the PDA. The PDA is an independent public corporation and its governance rests in a twelve

member Council. This Council appoints an Executive Director to administer the affairs of the PDA as

prescribed by its charter.

The charter of the PDA directs the PDA to manage the buildings and open space in the Market so that the

properties and traditional uses of the Market are preserved and maintained. The charter also directs the

PDA to ensure that a place for farmers to sell their goods directly to consumers is maintained, to ensure

that services to low and moderate income persons continue to be provided, and that opportunities for

small, owner operated businesses continue to be available in the Market.

To that end, the PDA provides property management services to over 220 small commercial tenants within

its properties in the nine-acre District. It offers space to four social service agencies at lower-than-market

rates and provides over 300 residential units to the low and moderate income population. The PDA also

offers year-round sales space on a daily basis to farmers wishing to sell direct to the public in a farmer's

market venue. Daily rental spaces (daystalls) that are not rented to farmers are rented to craft vendors

selling their original arts and crafts.

As an independent public agency, the PDA operations are supported entirely from its tenants' rents,

commercial, residential, and daystall, plus minor amounts from investment and miscellaneous sources.

The PDA, as a real estate owner and development entity, has some properties held in separate entities that

it controls. These entities are referred to as component units in these financial statements, and the PDA

itself is referred to as the primary government, as required by the Government Accounting Standards

Board.


2 065200fs123112 Revised: 5/16/2013 1:45 PM csk

Major Initiatives

Beginning in the early 2000s, the PDA began planning for a major reinvestment into the Market properties.

These plans contemplated major systems and infrastructure improvements to the buildings of the Market,

seismic upgrades, accessibility improvements, and major repairs. The PDA worked with the City to place a

Market Capital Renovation property tax levy ("the Levy") on the ballot in 2008. The $73 million ballot

measure was passed, and the PDA began construction in the spring of 2009 on a major renovation of the

Market buildings and systems. Construction is intended to continue through 2013. The objective of this

major undertaking is to preserve the Pike Place Market as a sustainable community and public place for

future generations. The new systems will provide better service and comfort to tenants and visitors.

Additional elevators will improve accessibility, and new public restrooms provide much needed capacity.

The life safety improvements are intended to better protect the buildings and their occupants from fire,

earthquakes, and other natural disasters.

Construction spending for the year ended December 31, 2012, totaled nearly $6.4 million in PDA

properties and those of its component units. The project is divided into Phases, and spending in 2012 was

for Phases III and IV. The budget for Phases III and IV is approximately $20 million, and is expected to be

completed in 2013. The project faced no significant cost overruns or schedule setbacks in 2012 and none

are foreseen in the completion of the project.

Overview of the Financial Statements

Assets of the PDA exceeded liabilities at December 31, 2012, by $99.5 million (net position). Of this, $27.1

million is unrestricted and may be used to meet the PDA's ongoing operating obligations.

Net assets increased by $7.5 million in 2012. Of this, $6.4 million is attributable to the Levy funding of the

renovation project as described above. The remainder of the change in net assets is largely attributable to

a gain from acquisitions of the Pike Place Marketing Funding, LLC ("PPMF") and Pike Place Investment

Fund, LLC ("PPIF") of $2.3 million and loss from operation of $2.1 million in the PDA's normal operations.

Capital assets, net increased by $4.1 million, financed primarily through Levy funding.


3 065200fs123112 Revised: 5/16/2013 1:45 PM csk

Financial Position (or Net Position)

2012 2011

Assets

Current assets 4,600,441$ 5,375,765$

Non-current assets 53,821,303 57,191,935

Capital assets, net 83,503,186 79,733,447

Total assets 141,924,930$ 142,301,147$

Liabilities

Accounts payable and accrued expenses 3,525,459$ 6,005,904$

Current portion of deferred master lease revenue 466,332 466,332

Current portion of loans payable 76,021 781,159

Current portion of bonds payable 1,065,727 1,017,546

Total current liabilities 5,133,539 8,270,941

Deferred master lease revenue, net of current portion 24,326,987 24,793,319

Loans payable, net of current portion 3,927,509 7,188,326

Bonds payable, net of current portion 8,390,284 9,450,945

Long-term obligation 680,692 680,692

Total long-term liabilities 37,325,472 42,113,282

Total liabilities 42,459,011 50,384,223

Net Position

Net investment in capital assets 69,362,953 60,614,779

Restricted for required reserves 2,997,523 3,497,434

Unrestricted 27,105,443 27,804,711

Total net position 99,465,919 91,916,924

Total liabilities and net position 141,924,930$ 142,301,147$

The balance sheet presents the assets, liabilities, and net position of the PDA at the end of the fiscal year.

The purpose is to give a snapshot of the financial condition of the PDA at a certain point in time.

Total assets of the PDA amounted to $141.9 million and $142.3 million at December 31, 2012 and 2011,

respectively. Investments in Market properties are reflected in both the PDA (primary government) and

the component units as some of the properties have been master leased to two entities controlled by the

PDA and capital spending has occurred in these properties. The complete financial statements indicate

the full amount of the increase in capital assets.

The PDA's primary asset base is its real property in the Market Historic District and these properties make

up $83.5 million of the total $141.9 million or 59 percent of total assets as of December 31, 2012. The

remainder of the PDA's total assets is comprised, for the most part, of cash, cash reserves, and two loans

receivable, representing 39 percent of the total assets.


4 065200fs123112 Revised: 5/16/2013 1:45 PM csk

Total liabilities of the PDA were $42.5 million and $50.4 million at December 31, 2012 and 2011,

respectively. The PDA's major liabilities consist of real estate loans, PDA bond issues, and deferred master

lease revenue. The decrease in total liabilities at the end of 2012 from 2011 is due to the acquisition of

PPMF and PPIF, and the subsequent dissolution of the entities, including the PDA's related debt.

Net position represents the PDA's equity and represents a strong financial position relative to the PDA's

debt. Net position is divided into three categories. The first category is capital assets net of related debt

and represents the PDA's land, buildings, structures, equipment, and construction in progress, less any

outstanding debt related to these assets. The second category represents assets, generally cash that has

external limitations on the way it may be used. The last category of net position is unrestricted and these

are available for use in the PDA's normal operations. Certain amounts of unrestricted net position are

designated by the PDA Council for particular uses and those are described in more detail in the notes to

the financial statements.

Statement of Revenue, Expenses, and Changes in Net Position

2012 2011

Operating revenue 9,530,695$ 9,407,412$

Operating expenses (11,665,487) (10,632,714)

Operating loss (2,134,792) (1,225,302)

Non-operating revenue 10,625,948 18,862,858

Non-operating expenses (942,161) (941,072)

Net non-operating income 9,683,787 17,921,786

Changes in net assets 7,548,995 16,696,484

Net position, beginning of year 91,916,924 75,220,440

Net position, end of year 99,465,919$ 91,916,924$

The purpose of this statement is to present the PDA's operations and net revenue earned from those

operations. The PDA's operations are primarily real estate development and management. The PDA's real

estate holdings consist of commercial and residential properties and its primary revenue source is rent

from these holdings. The PDA's purpose is to operate the Pike Place Market in accordance to its charter

mandates, not necessarily to maximize income from operations. Residential rentals are made primarily to

low and moderate income persons, and commercial spaces are leased to small and unique owner

operated businesses at rates not generally available in downtown Seattle. The PDA's objective is to be

financially strong while preserving the traditional character of this unique commercial and residential

community.

With that in mind, operating loss was greater in 2012 compared to 2011.

Non-operating revenue and income reflect the Levy revenue received from the City that was funding the

Market renovation, as well as the gain on acquisition of PPMF and PPIF. This revenue is classified as non-

operating as it is nonrecurring and it is not a part of the PDA's normal operations. Non-operating

revenues also include interest income from reserves and investments.


5 065200fs123112 Revised: 5/16/2013 1:45 PM csk

Economic and Other Factors Affecting the PDA's Future

During 2013 the PDA will continue to invest in maintaining, managing, and supporting the Market’s core

infrastructure, mission, and programs. In addition to ensuring prudent levels of staffing and resources for

basic services in facilities, security, maintenance and capital program, additional support will be allocated

to the following key goals:

Continue development of concepts for the PC-1 North Project.

A concentrated investment in Farm and Food Programs including staff support for the Economy

Atrium Kitchen and event spaces, small farmer recruitment and retention and facilitation of region

wide Food Hub and Food Web effort.

Restructuring of daystall, farm and busker management efforts to facilitate more focused efforts in the

areas of arts and crafts, food and farm.

Management resources to support quality analysis and research of strategic issues.

Marketing programs designed to support key goals and deepen connections between Seattle

residents and the Market including downtown resident use of the Market as their daily food and

shopping resource.

Throughout 2012 the PDA demonstrated great resilience; generally performing better than the broader

economy. This can be attributed to several factors. First, the Market is a well-known destination in

addition to serving as a beloved local resource for daily produce and goods. As a destination, the Market

is generally perceived as having great value with no cost of entry beyond parking or public transit fare.

Further, the Market serves as a food center including produce, prepared meals and full service restaurants.

Most notably, we saw increases in mercantile sales in 2012, a strong indication that the economy is

moving in a direction that provides more discretionary spending.

Projected increases in hiring for 2013 are also positive signals for downtown and the Market with Amazon

rapidly expanding in south Lake Union, new institutions of higher learning establishing campuses and a

host of technology firms and corporations strengthening their footholds in downtown. Gains in tourism,

including increases in cruise passenger traffic are also positive signs. With the increase in employment

opportunities, it will also be important for us to continue to invest in our workforce in the Market to retain

and inspire our dedicated and knowledgeable staff.

We will continue to make prudent investments in annual capital improvements to buildings and

infrastructure in the Market. While a vast majority of these needs have been met through the levy-funded

renovation, thoughtful and consistent annual reinvestment in the Market will ensure long-term

maintenance and preservation.

Planning for the Market’s future will continue with further development of concepts for the PC-1 North

Project schematic designs and further analysis of program components, revenue projections, and

anticipated long-term operating costs. Funding for the ongoing PC-1 North Project planning and design

will be discussed by the PDA Council in December following approval by the City Council of a

Memorandum of Agreement regarding development of the PC-1 North site. In addition to an anticipated

contribution of funds from the City and Alaskan Way Viaduct Parking Mitigation funds, PDA funds for

project design will come from the PDA’s Capital Reserve and Replacement Fund. We will also continue to

actively monitor the impacts to the Market as work related to removal of the viaduct continues to move

north including traffic patterns on Western.


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During 2013 the PDA will dedicate special focus in the Market’s founding mission in food and farm. The

realization of the long held goal of establishing a demonstration kitchen, coupled with the ability to meet

the demand for event space in the Market will allow us to support a significant community need. This

effort dovetails with substantial focus on our Farm Program, including detailed analysis of the Market’s

role in regional Food Huband food equity initiatives, and support for the growth and success of small

farmers and food providers. The Economy Atrium Kitchen and our Farm Program are distinct disciplines;

however, the synergy of these two efforts will allow the Market to continue to take a leading role in

directly connecting consumers to their food producers and further establish the Market as the center of

Seattle’s food culture.

Finally, during 2013 PDA will continue to provide modest, but critically needed, support for the social

service efforts in the Market. Funding is allocated to support a new partnership with AmeriCorps that will

provide full-time volunteers supporting a broad range of services including the Food Bank, Senior Center,

and food equity and access portions of our Farm Program. A modest increase has also been included to

support continued resident advocacy efforts ensuring that residents in need are connected with available

services.


INDEPENDENT AUDITORS' REPORT

To the Council

Pike Place Market Preservation

and Development Authority

Seattle, Washington

We have audited the accompanying financial statements and the aggregate discretely presented component units of

the Pike Place Market Preservation and Development Authority ("the PDA"), a public governmental corporation, as of

and for the year ended December 31, 2012, which collectively comprise the PDA's basic financial statements as listed

in the table of contents.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with

accounting principles generally accepted in the United States; this includes the design, implementation, and

maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free

from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit

in accordance with auditing standards generally accepted in the United States and the standards applicable to

financial audits contained in Government Auditing Standards, issued by the comptroller general of the United States.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the

financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial

statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of

material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,

the auditor considers internal control relevant to the PDA's preparation and fair presentation of the financial

statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of

expressing an opinion on the effectiveness of the PDA's internal control. Accordingly, we express no such opinion. An

audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant

accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the net position of the

PDA and the aggregate discretely presented component units as of December 31, 2012, and the respective changes in

their net position and their cash flows for the year then ended in accordance with accounting principles generally

accepted in the United States.


8

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States require that the management's discussion and analysis

be presented to supplement the basic financial statements. Such information, although not a part of the basic

financial statements, is required by the Government Accounting Standards Board, who considers it to be an essential

part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or

historical context. We have applied certain limited procedures to the required supplementary information in

accordance with auditing standards generally accepted in the United States, which consisted principally of inquiries of

management regarding the methods of preparing the information and comparing the information for consistency

with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained

during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the

information because the limited procedures do not provide us with sufficient evidence to express an opinion or

provide any assurance.

Other Information

Our 2012 audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The

supplementary information on page 33 is presented for the purposes of additional analysis and is not a required part

of the basic financial statements.

Such information is the responsibility of management and was derived from and relates directly to the underlying

accounting and other records used to prepare the financial statements. The information has been subjected to the

auditing procedures applied in the audit of the financial statements and certain additional procedures, including

comparing and reconciling such information directly to the underlying accounting and other records used to prepare

the financial statements or to the financial statements themselves, and other additional procedures in accordance with

auditing standards generally accepted in the United States. In our opinion, the information is fairly stated in all

material respects in relation to the financial statements as a whole.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated ________________ on our

consideration of the PDA's internal control over financial reporting and on our tests of its compliance with certain

provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to

describe the scope of our testing of internal control over financial reporting and compliance and the results of that

testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an

integral part of an audit performed in accordance with Government Auditing Standards in considering the PDA's

internal control over financial reporting and compliance.

_________________


See Notes to Financial Statements

9 065200fs123112 Revised: 5/16/2013 1:45 PM mrb

PIKE PLACE MARKET PRESERVATION AND DEVELOPMENT AUTHORITY

STATEMENT OF NET POSITION

December 31, 2012

ASSETS PDA

Discrete

Component Units

Current Assets

Cash and cash equivalents 1,784,286$ 184,509$

Accounts receivable, tenants 167,409 20,930

Accounts receivable, levy 240,223

Accounts receivable, other 444,729

Accounts receivable, related parties 1,741,084 675,259

Prepaid lease, current portion 466,332

Other prepaid expenses 222,710

Total current assets 4,600,441 1,347,030

Long-Term Assets

Designated cash and cash equivalents 11,672,396

Restricted cash and cash equivalents 2,997,523 1,862,310

Restricted investments 161,690

Financing lease receivable 2,344,129

Prepaid lease, less current portion 24,326,987

Loans receivable 36,700,794

Loan fees, net of accumulated amortization of

$205,552 (for the PDA) 21,825 1,596,661

Bond issuance costs, net of accumulated amortization

of $67,184 84,636

Capital assets, net 83,503,186 31,760,032

Total assets 141,924,930$ 61,054,710$

LIABILITIES AND NET POSITION

Current Liabilities

Accounts payable 1,739,283$ 16,666$

Accounts payable, related party 675,734 1,714,090

Accrued expenses and deposits payable 1,110,442 20,797

Interest payable 782,277

Current portion of deferred master lease revenue 466,332


Current portion of bonds payable 1,065,727

Total current liabilities 5,133,539 2,552,469

Long-Term Liabilities

Deferred master lease revenue, net of current portion 24,326,987

Loans payable, net of current portion 3,927,509 51,361,316

Bonds payable, net of current portion 8,390,284

Long-term obligation 680,692

Total long-term liabilities 37,325,472 51,361,316

Total liabilities 42,459,011 53,913,785

Net Position

Net investment in capital assets 69,362,953

Restricted for required reserves 2,997,523

Unrestricted 27,105,443 7,140,925

Total net position 99,465,919 7,140,925

Total liabilities and net position 141,924,930$ 61,054,710$



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STATEMENT OF REVENUE, EXPENSES, AND CHANGES IN NET POSITION

For the Year Ended December 31, 2012

PDA

Discrete

Component Units

Operating revenue

Rent 5,800,558$ 7,257,897$

Parking 2,684,483

Management fees 786,363

Security 50,425

Contributions and grants 22,000 335,691

Miscellaneous 186,866

Total operating revenue 9,530,695 7,593,588

Operating expenses

Property management 6,157,353 4,144,453

Depreciation and amortization 2,915,966 955,247

Parking 1,391,325

Security 1,028,337

Professional fees 172,506 733,626

Total operating expenses 11,665,487 5,833,326

Operating income (loss) (2,134,792) 1,760,262

Non-operating revenue (expenses)

Interest income 976,496 2,292

Gain on acquisitions of PPMF and PPIF 2,317,325

Forgiveness of interest 22,750

Levy revenue 6,366,969

Developer fee 682,528

Capital grant 259,880

Interest expense (812,586) (844,469)

Amortization of bond issuance costs and loan fees (129,575) (52,836)

Total non-operating revenue (expenses) 9,683,787 (895,013)

Change in net position 7,548,995 865,249

Net position, beginning of year 91,916,924 6,275,676

Net position, end of year 99,465,919$ 7,140,925$



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STATEMENT OF CASH FLOWS


PDA

Discrete

Component Units

Cash Flows from Operating Activities

Cash received from tenants for rent 5,859,870$ 7,243,313$

Cash received from parking and other customers 3,205,573 802,023

Cash paid to employees (5,069,680) (50,716)

Cash paid to suppliers and others (3,423,158) (5,262,132)

Net cash flows from operating activities 572,605 2,732,488

Cash Flows from Non-Capital Financing Activity

Advances from (to) related parties 806,935 (112,495)

Cash Flows from Capital and Related Financing Activities

Purchases of capital assets (6,685,706) (3,255,292)

Change in restricted cash 499,912 1,310,570

Levy funds received 7,821,736

Developer fee received 64,427

Capital grant funds received 8,535

Interest paid (794,039) (711,753)

Repayment of accounts payable related to capital purchases, net (2,854,805)

Repayment of loans payable (781,159) (18,454)

Repayment of bonds payable (1,012,932)

Net cash flows from capital and related

financing activities (3,734,031) (2,674,929)

Cash Flows from Investing Activities

Interest received 691,051 2,292

Sales of investments 52,936

Acquisition of PPMF and PPIF (65,001)

Return of capital in PPMF and PPIF, net of dissolution

expenses 41,594

Net cash flows from investing activities 667,644 55,228

Net change in cash (1,686,847) 292

Cash and cash equivalents, beginning of year 15,143,529 184,217

Cash and cash equivalents, end of year 13,456,682$ 184,509$

Included in the balance sheet as follows:

Cash and cash equivalents 1,784,286$ 184,509$

Designated cash and cash equivalents 11,672,396 -

13,456,682$ 184,509$



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STATEMENT OF CASH FLOWS


(Continued)

PDA

Discrete

Component Units

Reconciliation of Operating Income (Loss) to Net Cash

Flows from Operating Activities

Operating income (loss) (2,134,792)$ 1,760,262$

Adjustments to reconcile operating income (loss) to

net cash flows from operating activities

Depreciation 2,915,967 955,247

Deferred master lease revenue/prepaid lease (466,332) 466,332

Change in operating assets and liabilities

Accounts receivable, tenants and other 1,079 (14,584)

Prepaid expense (23,236)

Accounts payable and accrued expenses 279,919 (434,769)

Cash flows from operating activities 572,605$ 2,732,488$


13 065200fs123112 Revised: 5/16/2013 1:45 PM mrb

NOTES TO FINANCIAL STATEMENTS

Note 1. Organization and Summary of Significant Accounting Policies

Organization and Nature of Operations

Pike Place Market Preservation and Development Authority ("the PDA"), is a public governmental

corporation established by charter issued by the City of Seattle ("the City") in 1973. The charter obligates

the PDA to preserve, redevelop, and manage the Pike Place Market ("the Market") which resides in a nine-

acre historical district in downtown Seattle. According to the charter, the PDA is required to preserve

these historical properties, assure the Market's economic viability, provide opportunities and services to

low and moderate income people, maintain the tradition of a farmers market for direct sale of fresh

produce by the farmer to the consumer, and enhance the economic health of small owner-operated

businesses, farmers, and craftspeople. The market properties were renovated using a combination of

private and federal funds during the 1970s and early 1980s. In addition, the State of Washington

Department of Community Development has a historic preservation easement on the property.

Some of the market buildings are approximately 100 years old, and the last major renovation was

completed in the late 1970s. At that time, most Market buildings were purchased by the City and

transferred to the PDA. In recent years, the PDA has embarked on a major capital planning program and

has determined that another major investment in Market buildings and systems is needed to continue the

Market's traditional use. The City approved a $73 million property tax levy ("the Levy") through which

$68.6 million will be invested in renovation and upgrades to Market properties over a period of three years

through the PDA, and the remaining $4.4 million will be used by the City to pay costs of issuance and debt

service of City debt incurred. These improvements include seismic retrofitting, mechanical and electrical

upgrades, major plumbing and building repairs and replacements, as well as public amenities such as new

public restrooms and elevators. The Levy was passed by the voters in November 2008, and construction is

substantially complete, although certain projects are expected to be completed in 2013. The PDA earns

the Levy funding by making qualified expenditures. During 2012, the PDA earned $6.4 million in Levy

funds (by making qualified expenditures). Of this amount, $240,000 was receivable at December 31, 2012.

Through December 31, 2012, $64.9 million of the $68.6 million of Levy funds had been earned by the PDA.

Discretely Presented Component Units

LaSalle Senior Housing LLC ("LASLLC"), Pike Place Market QALICB ("PPMQB"), and Pike Place Market QB2

("PPMQB2") are considered component units of the PDA, discretely presented in a separate column on the

face of PDA's basic financial statements. As the managing member of LASLLC, and the managing agent of

PPMQB and PPMQB2, the PDA is financially accountable for and oversees the day-to-day operations of

these three separate legal entities. LASLLC, PPMQB, and PPMQB2 report on a fiscal year-end consistent

with the PDA primary government. They issue their own financial statements. The financial statements of

LASLLC, PPMQB, and PPMQB2 were audited separately. Copies of these financial statements may be

obtained by contacting the PDA. Discretely presented component units are also discussed in Note 13.


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On December 27, 2012, Pike Place Market Funding, LLC (a discretely presented component unit of the PDA

in 2011) ("PPMF"), as well as Pike Place Investment Fund, LLC ("PPIF"), were acquired by the PDA. Both

wholly-owned subsidiaries were dissolved on December 31, 2012, and therefore, have not been

consolidated in these financial statements (but their assets and liabilities are included in these financial

statements) (see Note 11).

Financial Statement Presentation

The financial statements are presented in accordance with governmental accounting principles generally

accepted in the United States.

Basis of Accounting

Due to its business-like operations, the PDA is considered as a stand-alone proprietary entity. The

financial statements have been prepared using the economic resources measurement focus and the

accrual basis of accounting. All assets and all liabilities (whether current or noncurrent) associated with its

activities are included on the balance sheet. Revenue is recognized when earned and expenses are

recorded when an obligation has been incurred. Capital asset purchases are capitalized.

Cash and Cash Equivalents

For cash flow purposes, highly liquid investments with an original maturity of less than three months that

are not restricted are considered cash equivalents. Designated and restricted cash and cash equivalents

are described in Notes 2 and 3.

The PDA places cash and cash equivalents with banks, and the State of Washington Local Government

Investment Pool ("the LGIP"). The LGIP is an un-rated 2a-7 like pool, as defined by Governmental

Accounting Standard No. 31. Accordingly, participants' balances in the LGIP are not subject to interest

rate risk, as the weighted average maturity of the portfolio will not exceed 90 days. According to

Government Accounting Standards guidelines, the balances are also not subject to custodial credit risk.

The credit risk of the LGIP is limited as most investments are either obligations of the United States

government, government sponsored enterprises, or insured demand deposit accounts and certificates of

deposit. Investments or deposits held by the LGIP are all classified as Category 1 risk level investments.

They are either insured or held by a third party custody provider in the LGIP's name.

At December 31, 2012, the PDA had other cash and cash equivalents in excess of federally insured limits.

Accounts Receivable

Accounts receivable from tenants are due for rent and related expenses and are generally unsecured.

Accounts receivable from the levy consist of unreimbursed capital expenditures from the City under the

Levy. Accounts receivable from others are due for the reimbursement of expenses. Related party

receivables are discussed in Note 4. The PDA considers all accounts greater than 30 days old to be past

due and uses the allowance method for recognizing bad debts. When an account is deemed uncollectible,

it is generally written off against the allowance. Management determined no allowance was necessary at

December 31, 2012.

Loan Fees and Bond Issuance Costs

Loan fees and bond issuance costs are deferred and amortized over the term of the loans or bonds using

the effective interest method.


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Capital Assets

The capitalization policy for building improvements includes all items with a unit cost of $2,500 or more,

and an estimated useful life of more than ten years. The capitalization policy for equipment includes all

items with a unit cost of $500 or more, and an estimated useful life of more than five years. The costs of

normal maintenance and repairs which do not increase the value of the assets or materially extend asset

lives are charged to operating expenses in the year the expense is incurred.

Depreciation is computed using the straight line method over the estimated useful lives of the assets.

Buildings (excluding the garage) are depreciated over periods up to 70 years. Building improvements and

the garage are amortized/depreciated over periods up to 40 years. Other property and equipment are

depreciated over five years.

Capital assets are also discussed in Note 6.

Net Assets

Net assets are comprised of various net earnings from operating revenue, non-operating revenue, and

expenses. Net assets are classified in the following three components:

Invested in capital assets, net of related debt – This component of net assets consists of capital assets,

net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages,

loans, or other borrowings that are attributable to the acquisition, construction, or improvement of

those assets. As of December 31, 2012, the total invested in capital assets, net of accumulated

depreciation, was $83,503,186 and related debt was $14,140,233.

Restricted – This component of net assets consists of external constraints imposed by creditors

(through debt covenants), grantors, contributors, or laws or regulations of other governments or

constraints imposed by law through constitutional provisions or enabling legislation, that restrict the

use of net assets. The PDA had restricted net assets of $2,997,523 as of December 31, 2012 (see

Note 3).

Unrestricted – This component of net assets consists of net assets that do not meet the definition of

"restricted" or "invested in capital assets, net of related debt."

Classification of Revenue and Expenses

The PDA distinguishes operating revenue and expenses from non-operating items in the preparation of its

financial statements according to the following criteria:

Operating – Operating revenue and expenses generally result from providing rental, parking, and security

services in connection with the PDA's principal ongoing operations. Principal operating revenues include

rent, parking, property management, and security fees. Operating expenses include property

management, parking, security, professional fees and other expenses related to delivery of rental, parking,

and security services.

Non-operating – All revenue and expenses not meeting this definition are reported as non-operating

revenue and expenses. Levy revenue is considered non-operating revenue as it is restricted for

construction projects planned over the next year. Levy revenue is recognized when renovation

expenditures are incurred and determined to be qualified as reimbursable under the Levy. Gain on

acquisition of PPMF and PPIF is also considered non-operating income as it is non-recurring (refer to

further discussion of the gain on acquisition in Note 11).


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Rent Revenue

The PDA receives regular monthly income from residential and commercial tenants under operating leases.

Revenue is recognized at the face value of the lease agreement rather than on the straight-line method

over the lease term as management believes the difference would be immaterial. Residential leases are

stated at a fixed monthly rate, and commercial leases are stated at a base rate or a percentage of monthly

sales, whichever is greater. Most commercial tenants pay rent based on a percentage of monthly sales.

Generally, residential lease contracts are for a one-year term, and are always cancelable with a 30-day

notice by either party. Commercial lease contracts have terms up to five years and are noncancelable (see

Note 10).

Deferred Master Lease Revenue

On March 2, 2011, the PDA entered into a 55 year lease agreement allowing PPMQB2 to lease six

buildings within the Pike Place Market Historic District. The PDA received $25,648,261 from PPMQB2 for

the lease of the six buildings for the 55 year period from March 2, 2011 to February 28, 2066. The

deferred master lease revenue is being recognized over the life of the lease. Lease revenue in 2012 was

$466,332, and lease revenue over the next five years is expected to be $466,332 each year. The current

and non-current portions of the prepaid master lease payment are presented as follows in the statement

of net position at December 31, 2012:

Current portion of deferred master lease revenue 466,332$

Deferred master lease revenue, net of current

portion 24,326,987

24,793,319$

These amounts are considered assets of PPMQB2 (the discretely presented component unit) as they

represent lease payments made in advance. The amounts have been collected in advance by the Market,

so they are considered liabilities.

Income Taxes

As a public governmental corporation, the PDA is exempt from income taxes.

Use of Estimates

The preparation of financial statements in conformity with governmental accounting principles generally

accepted in the United States requires management to make estimates and assumptions that affect the

reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of

financial statements, and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

Note 2. Cash and Cash Equivalents

The PDA's cash and cash equivalents are categorized to give an indication of the level of custodial risk

assumed by the PDA. Category 1 includes cash and cash equivalents that are insured or registered and are

held by the PDA or its agent in the PDA's name. All cash and cash equivalents at December 31, 2012, are

Category 1.


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On December 31, 2012, the cost basis of cash and cash equivalents was as follows:

Cost Category

Investment in State of Washington LGIP 12,788,999$ 1

Money market and checking accounts 3,665,206 1

16,454,205$

These amounts are presented in the balance sheet as follows:

Cash and cash equivalents 1,784,286$

Designated cash and cash equivalents 11,672,396

Restricted cash and cash equivalents 2,997,523

16,454,205$

The composition of designated cash and cash equivalents is as follows:

Capital equipment and capital

budget carryovers 7,968,009$

Minimum operating reserve 1,357,064

Non-levy projects reserves 1,238,947

PC-1 garage 419,670

Low income housing reserve 383,995

Reserve for contingencies 304,711

11,672,396$

The composition of restricted cash and cash equivalents is discussed in Note 3.

Note 3. Restricted Cash and Cash Equivalents

Restricted cash and cash equivalents consist of the following:

Retainage reserves – Funds reserved for payment to construction contractors due upon completion of

Levy projects.

PC-1 garage – Funds restricted for debt service to provide funds for the Special Obligation Refunding

Bonds.

Low-income housing reserves – Funds restricted for supporting and maintaining the affordability of certain

low-income housing units.

Senior Center reserves – Funds reserved for Pike Market Senior Center capital maintenance and

replacement.

Security deposits – Funds held as tenant security deposits.


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PDA refunded bond reserves – Debt service reserves funds for bonds refunded in 2009.

Replacement reserves – Funds restricted for Sanitary Market capital replacement.

Pine residential revenue fund – Funds set aside for Pine Residential Revenue Fund to be used to pay

operating costs, maintenance costs, and interest and principal payments on outstanding bonds.

The composition of restricted cash and cash equivalents is as follows:

Retainage reserves 718,285$

PC-1 garage reserves 661,956

Low income housing reserves 511,539

Senior Center reserves 351,100

Security deposits 334,477

PDA refunded bond reserves 301,378

Replacement reserves 77,826

Pine residential revenue fund 40,962

2,997,523$

Note 4. Related Party Transactions

LaSalle Senior Housing LLC

LASLLC is a limited liability company formed by the PDA and Market Foundation (described below) to

develop and operate low-income residential housing in the LaSalle Building. The LaSalle Building is one of

the buildings located in the Market. The PDA is the managing member of LASLLC and holds a 0.01%

interest. The Market Foundation owned the other 99.99% interest, and in 2005, the Market Foundation

transferred its interest in LASLLC to an investment company called National Equity Fund Partners ("the

NEFP"). In addition, NEFP obtained the right to receive low-income housing tax credits resulting from this

low-income residential housing project. In exchange, the NEFP committed to invest over $8,000,000 into

LASLLC.

In April 2005, the PDA leased property to LASLLC for $2,020,000 under a financing lease agreement which

terminates on December 31, 2085. Upon execution of this lease, LASLLC paid an initial rent payment of

$240,000 to the PDA. Interest at the rate of 4.68% compounded annually accrues on the unpaid balance

of $1,780,000. Interest earned from LASLLC was $104,801 in 2012. Interest receivable from LASLLC

(included in the financing lease receivable on the statement of net position) was $564,129 at December 31,

2012. The financing lease receivable is unsecured.

LASLLC is liable to make payments (considered principal and interest) of the greater of $92,723 or

available net cash flows subjected to payment priority according to the agreement between the PDA and

LASLLC that describes how the property is to be managed ("the Operating Agreement"). Beginning 2058,

annual payments will increase by $100 through 2085. As of December 31, 2012, there were no available

net cash flows, and no interest or principal has been paid to date.

Additionally, under this financing lease, the PDA was granted first right of refusal to purchase the

residential portion of the LaSalle Building, or the NEFP's interest in LASLLC, after April 2021 (the end of the

tax credit period).


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The PDA also acts as the managing member of LASLLC. Certain administrative expenses are initially paid

by the PDA and subsequently reimbursed by LASLLC. Total expenses paid by the PDA on behalf of LASLLC

were $307,296 in 2012. Additionally, the PDA earned management fees (including accounting fees) of

$80,096 in 2012. Accounts receivable related to unreimbursed expenditures and unpaid management fees

at December 31, 2012, was $31,820.

Under the Operating Agreement, the PDA has agreed to advance funds to cover operating deficits not

funded from the operating reserve. Any such advances may be repaid from project cash flow in

subsequent years or from proceeds of sale or refinance of the property, if that were to occur.

LASLLC is included in these financial statements as a discreetly presented component unit.

Market Foundation

The Market Foundation is a nonprofit corporation incorporated under the laws of the State of Washington.

The Market Foundation raises money to help pay for the services for the needy within the Market's

historical district and contributes to the PDA's food subsidy and capital programs. Under the terms of a

service agreement, the PDA subsidizes certain Market Foundation employees' salary and benefits, and

subsidizes a portion of its administrative office expenses. The total subsidized expenses incurred during

2012 were $258,022. Other related administrative expenses of the Market Foundation are initially paid by

the PDA and subsequently reimbursed by the Market Foundation. Total reimbursable other administrative

expenses paid by the PDA on behalf of the Market Foundation were $219,070 in 2012. Accounts

receivable from the Market Foundation on December 31, 2012, was $26,780. Certain miscellaneous

amounts totaling $474 were owed to the Market Foundation on December 31, 2012, and are included in

accounts payable, related party.

Although the Market Foundation is a related party, due to lack of control, it is not included in these

financial statements.

Pike Place Market QALlCB (PPMQB)

PPMQB is a Washington state nonprofit corporation formed in 2009 to obtain funds under the New

Markets Tax Credit ("NMTC") program. This program, developed by the US Department of Treasury, was

created to encourage investments in low-income neighborhoods and community facilities, by offering tax

credits to a private investor. PPMQB board members are members of the PDA Council, and the PDA is the

managing agent of PPMQB. During 2012, the PDA leased the Fairley and Leland buildings and the

Hillclimb area to PPMQB under a long-term agreement that incorporates the benefits of the NMTC

financing program ("the PPMQB Agreement"). All rent revenues are collected by the PDA and distributed

to PPMQB. Certain administration expenses paid by the PDA on behalf of PPMQB are reimbursed by

PPMQB. During 2012, the following transactions occurred between the PDA and PPMQB:

The PDA collected $2,394,932 in rent revenues from the tenants and owes PPMQB $189,485 related to

these collections at December 31, 2012, presented as accounts payable, related party.

The PDA earned and received $406,844 in rent revenue relating to the leasing of the two buildings to

PPMQB mentioned above.

The PDA earned a management fee of $375,349. As of December 31, 2012, $235,000 was receivable

for such management fees.


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Certain administrative and operating expenses were initially paid by PDA on behalf of PPMQB, and

totaled $1,511,455 in 2012. At December 31, 2012, $58,580 was payable to PPMQB for overpayment

of operating expenses.

The PPMQB Agreement with PPMQB expires in 2049, and under terms of the PPMQB Agreement, PPMQB

is to pay the PDA operating lease expenses and management fees. No management fees are due during

the years ended December 31, 2016 through 2024. Management fees are recognized as revenue when

paid based on materiality and based on uncertainties associated with future collections. Future revenues

to be earned under the PPMQB Agreement for the years ending December 31 are as follows:

Operating Lease

Expenses Management Fee Total

2013 419,800$ 146,784$ 566,584$

2014 433,144 153,020 586,164

2015 446,888 159,498 606,386

2016 394,884 394,884

2017 271,248 271,248

Thereafter 13,741,026 6,354,793 20,095,819

15,706,990$ 6,814,095$ 22,521,085$

PPMQB is included in these financial statement as a discretely presented component unit.

Pike Place Market QB2 (PPMQB2)

PPMQB2 is a Washington state nonprofit corporation formed in 2010 to obtain funds under the NMTC

program. PPMQB2 board members are members of the PDA Council, and the PDA is the managing agent

of PPMQB2. During 2012, the PDA leased six buildings, Corner, Economy, Sanitary, Soames-Dunn, Stewart,

and Triangle, to PPMQB2 for purposes of renovating and rehabilitating them through the NMTC financing

program ("the PPMQB2 Agreement"). All rent revenues are collected by the PDA and distributed to

PPMQB2. Certain administration expenses paid by the PDA on behalf of PPMQB2 are reimbursed by

PPMQB2. During 2012, the following transactions occurred between the PDA and PPMQB2:

In 2012, the PDA collected $4,594,237 in rent revenues from the tenants and owes PPMQB2 $427,194

related to these collections at December 31, 2012, presented as accounts payable, related party.

The PDA earned $466,332 in rent revenue relating to the leasing of the six buildings.

The PDA earned a management fee of $330,918.

The PDA earned a developer fee of $682,258. As of December 31, 2012, $618,101 was receivable for

such developer fees.

Certain administrative and operating expenses, including construction costs, were initially paid by PDA

on behalf of PPMQB2, and totaled $3,614,330 in 2012. As of December 31, 2012, $829,383 was

receivable for such unreimbursed expenditures.

Under terms of the PPMQB2 Agreement, the PDA earns rent revenue for the six buildings, and an annual

management fee through 2066. Future revenues to be earned under the PPMQB2 Agreement are variable

based on future rentals. Additionally, under the Agreement, the PDA has guaranteed any future operating

deficits PPMQB2 may incur through March 2041.


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PPMQB2 is included in these financial statements as a discretely presented component unit.

Related party receivables (excluding the financing lease receivable from LASLLC) as of December 31, 2012,

are as follows:

Due from LASLLC 31,820$

Due from the Market Foundation 26,780

Due from PPMQB 235,000

Due from PPMQB2 1,447,484

Accounts receivable, related parties 1,741,084$

Note 5. Loans Receivable

In 2009, the PDA loaned $10,557,782 to Facilitators Investment Fund VII, LLC ("the Fund"). The Fund used

the loan proceeds, through other intermediary entities, to make NMTC loans to PPMQB. The loan bears

interest at 1.711%, although through February 24, 2016, interest-only payments are required at 0.50%.

Beginning February 24, 2016 (end of the tax credit earn-out period), annual principal and interest

payments are due in the amount necessary to repay the outstanding principal and unpaid interest of the

loan on February 24, 2049 (maturity). The loan is effectively secured by the capital investments of PPMQB.

At December 31, 2012, the loan has accrued interest of $538,741, of which $494,751 has been included in

the loan receivable balance. The remainder is included in accounts receivable, other, as it represents the

current portion of the interest to be received.

In 2011, the PDA loaned $25,648,261 to Pike Place Market Investment Fund, LLC ("PPM"). PPM used the

loan proceeds, through other intermediary entities, to make NMTC loans to PPMQB2. The loan bears

interest at 2.5%. Beginning February 28, 2018 (end of the tax credit earn-out period), annual principal and

interest payments are due in the amount necessary to repay the outstanding principal and unpaid interest

of the loan on March 2, 2041 (maturity). The loan is effectively secured by the capital investments of

PPMQB2. During 2012, the PDA earned and received $641,207 of interest on this loan receivable.

The loans receivable balance can be summarized as:

Loan related to PPMQB 10,557,782$

Related interest accrued 494,751

Loan related to PPMQB2 25,648,261

Accounts receivable, related parties 36,700,794$


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Note 6. Capital Assets

The following is a summary of capital assets at cost for 2012:

Description

Balance

December 31,

2011 Additions Retirements Transfers

Balance

December 31,

2012

Land 3,698,718$ -$ -$ -$ 3,698,718$

Construction in progress 8,610,907 6,685,706 (14,075,360) 1,221,253

Building 36,684,164 - 36,684,164

Building improvements 52,939,909 - 13,967,980 66,907,889

Equipment 1,039,465 - (179,215) 107,380 967,630

Capital improvement plan 404,809 - 404,809

Total cost 103,377,972 6,685,706 (179,215) - 109,884,463

Accumulated Depreciation

Buildings 11,361,089 711,905 12,072,994

Building improvements 11,030,535 2,110,742 13,141,277

Equipment 866,452 80,764 (179,215) 768,001

Capital improvement plan 386,449 12,556 399,005

Total accumulated

depreciation 23,644,525 2,915,967 (179,215) - 26,381,277

Capital assets, net 79,733,447$ 3,769,739$ -$ -$ 83,503,186$

Construction in progress consists mostly of costs related to the tax levy project, expected to be completed

in 2013, as well as initial design costs of the PC-1 north waterfront project, with construction expected to

commence in 2014.

Note 7. Long-Term Liabilities

Loans Payable

In December 2004, the PDA acquired land (referred to as the Creamery lot) from the City in exchange for a

loan due to the City in the amount of $455,000 (all of which was outstanding on December 31, 2012). The

loan accrues interest at 5% per annum. According to the terms of the loan agreement, the principal and

accrued interest become due in December 2023, at which time the City has agreed to forgive these

amounts as long as PDA used the land for the intended use outlined in the sales agreement. The PDA will

begin recognizing forgiveness of principal when compliance with terms of the loan has been significantly

met. Interest of $22,750 was forgiven by the City for the year ended December 31, 2012.


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In 2006, the PDA borrowed $180,000 from the City through a promissory note for the purpose of

financing a portion of the costs of development of the Community Facility to be used to serve primarily

low-to-moderate income persons through programs performed by LASLLC. The promissory note matures

on July 1, 2016, and is interest-free. A contingent interest becomes due if conditions as defined in the

agreement occur. According to the terms of the agreement, if PDA complies with all terms and conditions

in the agreement through maturity, all amounts owing on this note, including any contingent interest, shall

be forgiven. The City has a lien on the facility for which the loan was made.

In December 2005, the PDA borrowed $3,800,000 under a commercial loan for the purpose of purchasing

a commercial condominium at the corner of First & Pine streets. This loan is secured by the real property

purchased at First and Pine. Interest accrues at the rate of 5.4% and payments of principal and interest in

the amount of $21,338 are due monthly through maturity on December 31, 2015. No interest was

outstanding at December 31, 2012. The principal balance outstanding at December 31, 2012, was

$3,368,530.

In December 2005, the PDA borrowed a total of $3,893,922 from New Markets Investments XI, LLC (“NMI”)

for the purpose of construction of the commercial portion of the LaSalle Building. NMI was created solely

for the purpose of this financing, so it could utilize new markets tax credits. The tax credit investor/lender

is US Bank. The financing arrangement consisted of three separate loans:

Loan 1 is in the amount of $709,126;

Loan 2 is in the amount of $1,060,732; and

Loan 3 is in the amount of $2,124,064.

In accordance with the financing agreement, Loan 1 was repaid in full in December 2012. As more fully

described in Note 11, the PDA acquired 100% ownership in NMI (holder of Loan 2 and Loan 3) and

dissolved NMI, thereby retiring Loan 2 and Loan 3.

Following are the changes in loans payable for the year ended December 31, 2012.

Balance

December 31,

2011 Additions

Repayments /

Retirements

Balance

December 31,

2012

Current

Portion

City of Seattle loan 455,000$ -$ -$ 455,000$ -$

City of Seattle loan 2 180,000 - 180,000

First & Pine loan 3,440,563 - (72,033) 3,368,530 76,021

New Markets Investments

XI, LLC -

Loan 1 709,126 - (709,126) -

Loan 2 1,060,732 - (1,060,732) -

Loan 3 2,124,064 - (2,124,064) -

Total loans payable 7,969,485$ -$ (3,965,955)$ 4,003,530$ 76,021$

Loans Payable


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The scheduled principal and interest maturities of the loans for years ending December 31 are as follows:

Principal Interest Total

2013 76,021$ 180,037$ 256,058$

2014 80,229 175,829 256,058

2015 3,212,280 171,388 3,383,668

2016 180,000 180,000

2017

2018 - 2022

2023 455,000 455,000

4,003,530$ 527,254$ 4,530,784$

Bonds Payable Summary

Bonds payable for the year ended December 31, 2012, are as follows:

Refunding Bonds - Garage

Series 2002 PDA Special Obligation Revenue Refunding Bonds,

with remaining interest ranging from 4.1% to 4.8% and principal

payments due in annual amounts ranging from $705,000 to

$840,000 through November 1, 2017, for the garage. 3,850,000$

Refunding Bonds - Revenue

2009 PDA Refunding Bonds, with interest remaining payments

ranging from 4.0% to 5.0%, interest payments made semi-

annually, and remaining annual principal payments ranging from

$305,925 (including deferred interest of $5,925) to $455,000

through May 1, 2021. 3,335,925

Refunding Bond - Pine Residential Building

Series 2005 PDA Special Obligation Revenue Bond, with interest at

5.12% and monthly principal and interest payments of $14,149

due through July 1, 2015, for the Pine Residential Building (a

building located in the Market). 2,270,086

9,456,011

Current portion (1,065,727)

8,390,284$

The PDA is required to maintain certain debt service reserve levels for each of the outstanding bond series.

All reserve requirements were met in 2012.


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Bonds Payable – Details

Refunding Bonds – Garage

On November 24, 1987, the PDA issued $8,400,000 in Special Obligation Revenue Bonds for the purpose

of constructing a parking garage near the Market, which was substantially completed in the fall of 1989.

On March 7, 1991, the PDA refunded these 1987 bonds in advance with proceeds from the issuance of

$10,381,671 in Special Obligation Refunding Bonds, Series 1991, dated February 1, 1991. Bank of America

was contracted as the refunding agent and received $9,629,100 in refunding bond proceeds to service the

debt on the 1987 Special Obligation Revenue Bonds. These monies are held in trust by the refunding

agent and are used solely to repay principal and interest on the 1987 bonds.

These bonds are limited obligations of the PDA. The PDA has pledged net parking revenue from PC-1

garage to pay bond principal and interest. In addition, the City has unconditionally obligated itself to levy

an ad valorem tax, not requiring a consenting vote of the taxpayers, in order to fund debt service

payments on the bonds if revenue pledged by the PDA is insufficient to meet scheduled principal and

interest payments. The PDA reserves the right to redeem the outstanding serial bonds maturing after

November 1, 2002, in whole, or in part, on any interest payment date thereafter at a price of par plus

accrued interest to date of redemption. The serial bonds bear interest, from their issue date until the

bonds bearing such interest have been paid or their payment duly provided for, payable semiannually on

May 1 and November 1 of each year.

The series 2002 PDA Special Obligation Revenue Refunding Bonds were issued to partially refund the

Series 1991 PDA Special Revenue Refunding Bonds. This resulted in cash flow savings of $876,754 and an

economic gain of $814,756 at December 31, 2002. In accordance with governmental accounting

standards, this gain was not recorded in these financial statements.

Refunding Bonds – Revenue

The PDA has issued and refunded various series of tax-exempt Special Obligation Revenue Bonds,

beginning in 1991. The bonds were issued in order to refinance certain private bank mortgages.

The final refunding occurred in 2009 when the bonds were refinanced with the City with a face value of

$4,390,000.

Revenue Bond – Pine Residential Building

On June 17, 2005, the PDA issued $2,600,000 in a Special Obligation Revenue Bond for the purpose of

acquiring a residential condominium known as the Pine Residential Building. This bond is a limited

obligation of the PDA. The PDA has pledged the Pine Residential Building Housing gross revenue to pay

bond principal and interest. The bond is secured by a deed of trust on the building.


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Following are the changes in bonds payable for the years ended December 31, 2012.

Balance

December 31,

2011 Additions Repayments

Balance

December 31,

2012

Current

Portion

Series 2002 Revenue

Refunding Bonds 4,515,000$ -$ (665,000)$ 3,850,000$ 705,000$

2009 Refunding Bonds 3,631,306 (295,381) 3,335,925 305,925

Series 2005 Revenue Bond 2,322,185 (52,099) 2,270,086 54,802

Total bonds payable 10,468,491$ -$ (1,012,480)$ 9,456,011$ 1,065,727$

The principal and interest maturities of bonds payable for the following years ending December 31 are as

follows:

Principal Interest Total

2013 1,065,727$ 451,763$ 1,517,490$

2014 1,112,675 402,710 1,515,385

2015 3,257,635 296,568 3,554,203

2016 1,160,000 189,707 1,349,707

2017 1,210,000 134,150 1,344,150

2018 - 2021 1,649,974 175,000 1,824,974

9,456,011$ 1,649,898$ 11,105,909$

Long-Term Obligation

In conjunction with the PC-1 garage construction, the PDA entered into a contract with the City for the

purchase of the land upon which the PC-1 garage was built. As stated in the contract, beginning in 2003,

the PDA is required to pay the City 30% of Resulting Revenue, defined as gross revenue, less operating

and bond expenses, as principal payments. However, since there was no Resulting Revenue in 2012, the

full amount of this debt continues to be classified as long-term in these financial statements.

Once the Resulting Revenue exceeds zero, payments will be made until the later of (a) the life of the Series

1991 PDA Special Obligation Revenue Refunding Bonds described above, or (b) the City has been

reimbursed for the 1990 present value of the purchase price of the land plus the Additional Consideration.

The Additional Consideration is defined as the 1990 present value of the City's share of annual revenue for

1990 through 1998 from three surface lots currently managed by the PDA plus $62,500. The liability

recorded at December 31, 2012, of $680,692 represents the 1990 present value of the purchase price of

the land plus Additional Consideration.


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Note 8. Shared Parking Revenue Agreement with City of Seattle

In 1987, the PDA purchased the PC-1 South land from the City and built the Pike Place Market Garage with

bond funds. As part of the purchase agreement, the City engaged the PDA to manage surface parking lots

within the vicinity of the Market. Three of these lots were still in operation in 2012, and management of

the lots has been outsourced to a lot management company. These lots are the Desimone (or PC-1 North)

lot, the Lenora lot, and the Blanchard lot. Under the current revenue sharing agreement, effective

January 1, 2008 (as amended), and expiring December 31, 2014, 35% of the gross revenue (less all

applicable tax) of the Desimone lot and 45% of the gross revenue (less all applicable tax) of the Lenora

and Blanchard lots are paid to the City. Parking revenue in these financial statements is shown net of the

City's share totaling $256,369 in 2012.

Note 9. Employee Benefit Plan

The PDA has a defined contribution retirement plan covering substantially all employees. The plan

provides for voluntary, after-tax contributions by employees and contributions by the PDA at the

discretion of the PDA's governing Council. The PDA incurred approximately $307,000 in pension expense

in 2012.

Note 10. Future Rental Revenue

The PDA leases space to commercial tenants under noncancelable agreements. Terms of leases are

generally up to five years with options to extend up to two years. Most commercial leases include

percentage rent (based on a percentage of the tenant's sales) and fixed or variable escalation clauses.

Future minimum rentals to be received excluding options to extend, percentage rent, and variable

escalation clauses for the years ending December 31 are approximately as follows:

2013 $ 739,436

2014 691,229

2015 579,323

2016 421,010

2017 179,649

Thereafter 7,081

$ 2,617,728

Note 11. Acquisition of PPMF and PPIF and Subsequent Dissolution

On December 27, 2005, the PDA entered into its first NMTC project to renovate the LaSalle building's

commercial space, through investing $844,064 to obtain 39.74% ownership of PPMF, and then also

received three loans from NMI totaling $3,893,922 (as described in Note 7) which were used to make

capital improvements. In addition, Pike Market Senior Center & Food Bank (“Senior Center”) invested

$1,280,000 into PPMF (for the remaining 60.26% ownership).


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U. S. Bank invested $1,239,381 into PPIF (another entity facilitating NMTC investment) and was the 100%

owner of this entity. The tax credit period was 7 years and, therefore, all tax credits were earned by

December 27, 2012.

As of December 27, 2012, the PDA acquired the remaining 60.26% ownership interest in PPMF from the

Senior Center for consideration of $1, and effectively took control as the 100% owner of this entity.

Concurrently, the PDA acquired 100% ownership in PPIF from US Bank for consideration of $61,958, and

effectively took control as the 100% owner of this entity as well.

Assets of PPMF on the date of acquisition primarily consisted of receivables from PPIF which had a fair

value of $2,124,064 (Loan 3 at Note 7). Assets of PPIF on the date of acquisition consisted of receivables

(net of those with a corresponding payable to PPMF) from the PDA which had a fair value (and face value)

of $1,060,732 (Loan 2 at Note 7). Other assets and liabilities with a fair value of $38,551 (net of dissolution

expenses) were also acquired. The cash payment of $65,001 is considered the purchase consideration.

Since the fair value of the net assets of PPMF and PPIF were in excess of the purchase consideration, the

acquisition is recognized as a bargain purchase and a gain of $2,317,325 has been recognized in the

statement of revenue, expenses, and changes in net position for the year ended December 31, 2012. This

gain is similar to an extinguish of debt. The gain on acquisition is summarized as follows:

Fair value (and face value) of loans receivable acquired 3,184,796$

Fair value of other assets and liabilities acquired,

net of dissolution expensesnet of dissolution expenses 38,551

PDA's original investment in PPMF (844,064)

Purchase consideration (61,958)

Gain on acquisitions of PPMF and PPIF 2,317,325$

As the PDA became the 100% owner in two entities (PPMF and PPIF) on December 31, 2012, both would

be consolidated entities, and the receivables (at PPMF and PPIF) and payables (at the PDA) between the

entities would be eliminated, along with the investment in and member's equity. However, effective

December 31, 2012, both PPMF and PPIF were dissolved and, therefore, the investment in PPMF and PPIF,

and the related payables at the PDA were eliminated.

Note 12. Contingencies

The PDA is subject to claims and litigation incidental to its business. Management believes the ultimate

resolution of these routine matters will not have a material adverse effect on the PDA's balance sheet,

operations, or cash flows.

Note 13. Discretely Presented Component Units

As discussed in Note 1, LASLLC, PPMQB, and PPMQB2 are considered component units of the PDA,

discretely presented in a separate column on the face of the PDA's basic financial statements.


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Summarized discretely presented component unit balance sheet information as of December 31, 2012, is

as follows:

LaSalle Senior

Housing LLC

Pike Place

Market QALICB

Pike Place

Market QALICB2 Total

Assets

Current assets

Cash and cash equivalents 15,171$ 160,805$ 8,533$ 184,509$

Accounts receivable, tenants 20,930 20,930

Accounts receivable, related

parties 248,065 427,194 675,259

Prepaid lease, current portion 466,332 466,332

Total current assets 36,101 408,870 902,059 1,347,030

Restricted cash and cash

equivalents 924,446 937,864 1,862,310

Restricted investments 161,690 161,690

Prepaid lease, less current portion 24,326,987 24,326,987

Intangibles, net of amortization 365,452 226,329 1,004,880 1,596,661

Capital assets, net of accumulated

depreciation 8,417,018 12,585,032 10,757,982 31,760,032

Total assets 9,743,017$ 13,381,921$ 37,929,772$ 61,054,710$

Liabilities and Net Assets

Current liabilities

Accounts payable 11,324$ -$ 5,342$ 16,666$

Accounts payable, related party 31,606 235,000 1,447,484 1,714,090

Deposits payable 20,797 20,797

Interest payable 729,359 52,918 782,277


Total current liabilities 811,725 287,918 1,452,826 2,552,469

Long-term Liabilities

Loans payable, net of current

portion 3,666,880 14,111,436 33,583,000 51,361,316

Total liabilities 4,478,605 14,399,354 35,035,826 53,913,785

Net Position

Unrestricted 5,264,412 (1,017,433) 2,893,946 7,140,925

Total liabilities and net

position 9,743,017$ 13,381,921$ 37,929,772$ 61,054,710$


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Summarized discretely presented component unit income statement information for the year ended

December 31, 2012, is as follows:

LaSalle Senior

Housing LLC

Pike Place

Market QALICB

Pike Place

Market QALICB2 Total

Operating revenue

Rent 268,728$ 2,394,932$ 4,594,237$ 7,257,897$


Total operating revenue 604,419 2,394,932 4,594,237 7,593,588

Operating expenses

Property management 397,348 2,015,135 1,731,970 4,144,453

Depreciation 353,691 335,601 265,955 955,247

Professional fees 27,359 375,349 330,918 733,626

Total operating expenses 778,398 2,726,085 2,328,843 5,833,326

Operating income (loss) (173,979) (331,153) 2,265,394 1,760,262


Interest income 173 2,119 2,292

Interest expense (140,275) (52,918) (651,276) (844,469)

Amortization of bond issuance

costs and loan fees (10,873) (6,287) (35,676) (52,836)

Net non-operating

revenue (expenses) (151,148) (59,032) (684,833) (895,013)

Change in net position (325,127) (390,185) 1,580,561 865,249

Net position, beginning of year 5,589,539 (627,248) 1,313,385 6,275,676

Net position, end of year 5,264,412$ (1,017,433)$ 2,893,946$ 7,140,925$


065200fs123112 Revised: 5/16/2013 1:45 PM csk

S U P P L E M E N T A R Y I N F O R M A T I O N


32 065200fs123112 Revised: 5/16/2013 1:45 PM mrb


COMBINING STATEMENT OF REVENUE AND EXPENSES


PC-1 PDA Total

Operating revenue

Rent 52,235$ 5,748,323$ 5,800,558$

Parking 2,169,341 515,142 2,684,483

Management fees 786,363 786,363

Security 50,425 50,425


Miscellaneous 186,866 186,866

Total operating revenue 2,221,576 7,309,119 9,530,695

Operating expenses

Property management 6,157,353 6,157,353

Depreciation and amortization 300,578 2,615,388 2,915,966

Parking 1,133,837 257,488 1,391,325

Security 1,028,337 1,028,337

Professional fees 172,506 172,506

Total operating expenses 1,434,415 10,231,072 11,665,487

Operating income (loss) 787,161 (2,921,953) (2,134,792)


Interest income 1,044 975,452 976,496

Gain on acquisition 2,317,325 2,317,325

Forgiveness of interest 22,750 22,750

Levy revenue 6,366,969 6,366,969

Developer fee 682,528 682,528

Capital grant 259,880 259,880

Interest expense (201,592) (610,994) (812,586)

Amortization of bond issuance costs

and loan fees (99,201) (30,374) (129,575)

Total non-operating revenue (299,749) 9,983,536 9,683,787

Change in net position 487,412$ 7,061,583$ 7,548,995$


065200fs123112 Revised: 5/16/2013 1:45 PM csk

S U P P L E M E N T A L R E P O R T

I N A C C O R D A N C E W I T H G O V E R N M E N T

A U D I T I N G S T A N D A R D S


065200fs123112 Revised: 5/16/2013 1:45 PM mrb

INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT

OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS

To the Council

Pike Place Market Preservation

and Development Authority

Seattle, Washington

We have audited, in accordance with auditing standards generally accepted in the United States and the

standards applicable to financial audits contained in Government Auditing Standards, issued by the

Comptroller General of the United States, the financial statements and the aggregate discretely presented

component units of the Pike Place Market Preservation and Development Authority ("the PDA"), a public

governmental corporation, as of and for the year ended December 31, 2012, and the related notes to the

financial statements, which collectively comprise the PDA's basic financial statements, and have issued our

report thereon dated _______________.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered the PDA's internal control over financial reporting

("internal control") to determine the audit procedures that are appropriate in the circumstances for the

purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an

opinion on the effectiveness of the PDA's internal control over financial reporting. Accordingly, we do not

express an opinion on the effectiveness of the PDA's internal control.

A deficiency in internal control exists when the design or operation of a control does not allow

management or employees, in the normal course of performing their assigned functions, to prevent, or

detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination

of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement

of the organization's financial statements will not be prevented, or detected and corrected on a timely

basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is

less severe than a material weakness, yet important enough to merit attention by those charged with

governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this

section and was not designed to identify all deficiencies in internal control that might be deficiencies,

significant deficiencies, or material weaknesses. Given these limitations, during our audit we did not

identify any deficiencies in internal control that we consider to be material weaknesses, as defined above.

However, material weaknesses may exist that have not been identified.


35

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the PDA's financial statements are free of

material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,

contracts, and grant agreements, noncompliance with which could have a direct and material effect on the

determination of financial statement amounts. However, providing an opinion on compliance with those

provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The

results of our tests disclosed no instances of noncompliance that are required to be reported under

Government Auditing Standards.

Purpose of This Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance

and the results of that testing, and not to provide an opinion on the effectiveness of the PDA's internal

control or on compliance. This report is an integral part of an audit performed in accordance with

Government Auditing Standards in considering the entity's internal control and compliance. Accordingly,

this communication is not suitable for any other purpose.

__________________
