Council reviews draft housing cooperation agreement for Trailhead transit-oriented project; no vote tonight

The Issaquah City Council on May 5 reviewed a draft Housing Cooperation Agreement (HCA) between the City and the King County Housing Authority (KCHA) for the Trailhead Transit-Oriented Development, a two-building project that would include an affordable housing building and a market-rate building, a public plaza and a city-owned Opportunity Center.

City staff and KCHA representatives asked the council for guidance on five code waivers they say are needed to preserve the affordable building’s financial viability: exemption from the step-back requirement above the fifth floor, relief from ground‑floor parking-separation and transparency rules on certain frontages, flexibility in how private versus shared outdoor amenity area is provided, and allowing the affordable building to meet Washington’s Evergreen Sustainable Development Standard (ESDS) instead of LEED Platinum.

Andrea Snyder, deputy city administrator, told the council they were not asking for adoption tonight. “We’re here for you tonight not for a decision on the HCA, but rather your feedback and guidance,” she said. Pending council feedback, staff plans to return with the HCA for possible adoption in June.

Dan Landis, vice president of development for the King County Housing Authority, reviewed the project history and the changes that have reduced the site’s development capacity. He said the team first proposed a TOD here in 2016 and later acquired the CenturyLink (now Lumen) parcel in 2022. “We acquired the site in 2022 but at a cost over 5 times higher than what we had originally hoped,” Landis said, noting that construction costs and financing conditions have changed markedly since the original proposal.

KCHA’s current schematic calls for roughly 54 low-income housing tax‑credit units (targeted to 40–60% of area median income), about 200 market-rate units, a 10,000-square-foot Opportunity Center the city would own, and 3,600 square feet of housing for six people with developmental disabilities that would be owned by a nonprofit partner. The schematic and the HCA request also reflect a reduced buildable width after an historic short plat and new wetland buffer rules reduced the developable area; the presentation showed the developable width falling from 228 feet to about 178 feet — a roughly 28% reduction.

Maggie Carson, the project architect with Weber Thompson, explained the strongest technical argument for the step‑back waiver: the code requirement that buildings above five stories “step back” at that level would force a structural transition through the wood-framed portion of the building. Carson said that change would raise structural complexity and cost, and could remove family-sized units. “The loss of space renders the apartments unusable,” she said, adding that complying with the step‑back above the wood frame would cost roughly $1.2 million and could eliminate about six units and several three‑bedroom apartments the team is trying to preserve.

KCHA asked the city to allow the affordable building to substitute ESDS — a state sustainability standard required by many public funders — in place of LEED Platinum because duplicative certification would add cost without measurable public benefit, Landis said. KCHA and staff also requested leniency on ground-level transparency where the building fronts a mid‑block connection, the public plaza or other required frontages; the design team said necessary utilities and parking access must sit on some of those frontages.

Councilmembers asked detailed questions about financing, timeline and tradeoffs. Councilmember Kelly Jang said she supported the administration continuing to work with KCHA on sustainability “even if there’s not a specific certification” and that the step‑back alternative “looks better than the code‑minimum design” in the team’s renderings.

Several councilmembers urged attention to preserving three‑bedroom units, and multiple members raised concerns about whether similar waivers should apply to the market‑rate building so the two buildings read as compatible. Councilmember Joe and others pressed KCHA on the market‑rate partner situation: the market-side development partner left the project in 2020 and KCHA said it has not yet secured a market-rate developer; KCHA said it could hold the market-rate portion or attempt to develop it itself if necessary.

Andrea Snyder summarized next steps: staff will continue negotiations with KCHA, finalize outstanding technical and sustainability details, and return to council for possible adoption of an HCA in June. The team also said the site development permit application has been submitted and the current schedule anticipates building permits in August, construction starting in June 2026 and project completion in mid‑2028 if approvals and financing proceed.

Councilmembers praised the level of work but flagged a few continuing issues — including the potential loss of commercial space in the Opportunity Center, the risk that the market-rate building might never be built, and whether some of the requested code flexibility should be applied to both buildings — and asked staff and KCHA to return with refinements.

Notes on status and scope: no council motion or vote was taken on the HCA at the May 5 meeting; staff asked for council feedback and will return later for a formal action if directed. The council did approve the meeting’s consent calendar earlier in the evening by a single motion (vote recorded as 7–0).