In terms of history, growth and development, Maple Valley and Black Diamond are almost opposites of each other. Maple Valley is a relatively young city, incorporated in 1997, while Black Diamond has existed since the 1880s and became a city in 1954. Maple Valley experienced a surge in development and population growth in the past two decades, much of the land within Black Diamond remains undeveloped.

This also applies to their transfer of development rights programs. Maple Valley created its TDR program less than six months ago while Black Diamond passed its program in December 2003,  three years after King County had adopted the program.

Black Diamond’s approach to its TDR program

Unlike Maple Valley, Black Diamond doesn’t have property within its city limits owned by King County. As part of the program policy, no TDRs can be imported into the city from another part of the county. Essentially, this ensures that any time a TDR is used to increase the density of a property somewhere in the city, another property within the city is protected from development through a conservation easement.

Brian Ross, managing partner for YarrowBay, stated in a telephone interview that the single jurisdiction makes the program much easier for developers and property owners to navigate.

“I think the (TDR) program seems to work,” he said. “The biggest challenge is getting the sending site and receiving site in the same jurisdiction. That’s why what happens in Black Diamond works.”

Additionally, unlike Maple Valley, Black Diamond’s program has designated lands as either sending or receiving sites.

According to Black Diamond Community Development Director Steve Pilcher, most of the sending sites are open space areas or historic parts of the city, while the majority of the receiving sites are located on the west side of town. For example, one section of land located on the east side of town is a designated sending site, but is also required to send its TDRs, if purchased, to annexed land on the far east section of the city.

Other open space lands designated as sending sites includes property surrounding Mud Lake, Lake Majorine and Jones Lake, as well as property on the lower southeast section of Lake Sawyer.

Pilcher explained there were various reasons for this. First, lands located within the city limits were annexed over an extended period from King County. In 1991, for example, Black Diamond annexed 623 acres.

At the time, the city decided to shift the potential growth over to the west side of town, where a development would not be required to demolish any existing part of the town.

“Things were kind of set up to make the program work,” Pilcher said. “Our system is different from the county. You work to preserve the rural land while shifting growth into the urban area. We want to provide some compensation for people who can’t develop their land to the full extent.”

It was also done to be more practical since it is easier to build new infrastructure rather than try to renovate or replace an outdated one.

“That was the basic concept,” Pilcher said. “It’s an interesting town in how it developed. They thought, ‘Let’s let growth go to the areas of town where we can build new stuff, rather than where the streets are narrow.’ It makes no sense to put it where it can’t expand.”

Modifications made

Certain modifications were made to the TDR program in 2009, according to Pilcher, when King County adopted a new Sensitive Area Ordinance (SAO). The SAO enlarged the required buffers a development must have between a dwelling unit and an environmentally protected area, such as wetland. This impacted many properties in the city which have wetlands located on them.

The TDR program was adjusted to encourage evenly spread development, rather than clustering, while at the same time protecting the development value of the property affected by the SAO changes.

If, for example, a person owns one acre of land, they have the right to develop four units. If half of the property is declared a wetland, and thus unusable, the property owner still retains the development rights on the wetland that they can’t develop on, which gives them two separate options.

The first option is to cluster the four units into a more concentrated area of the one acre, rather than evenly spread them out. The developer would then close off the rest of the property from development as a buffer.

But some developers may not be enthusiastic about condensing growth, so the second option allows them to place a conservation easement on the wetland areas, receive the TDR credits, and then sell them or transfer them to another property which does not have environmentally protected area on it.

This way the owner avoids losing property value due to the changes made to the county’s SAO.

“It provides people with sending sites on their property the opportunity to get the financial compensation for it,” Pilcher said.

Master Planned Developments

In 1996 the Black Diamond Urban Growth Area Agreement (BDUGAA) was created, which stipulated several things. It required 542 acres of land within the existing city limits to be preserved as permanent open space and the preservation of an additional 984 acres of open space within unincorporated King County.

“That kind of laid the groundwork as Black Diamond began to grow and open space that would be preserved with the county,” Pilcher said.

An owner who plans to develop 80 or more acres is required to create a master planned development (MPD). When the City Council approved YarrowBay’s MPD, it required the Kirkland-based firm to develop at four units per acre. Also, 40 percent of the development density on a property must come from purchased development rights.

To meet the base density requirement for the two MPDs, 2,876 TDR certificates are required out of roughly 3,000 total TDRs in Black Diamond.

This means YarrowBay would need to purchase close to 96 percent of all the TDRs located in the city.

“It can be a challenge,” Pilcher said. “It assumes the people are willing to sell.”

Nevertheless, Ross stated that securing the requisite TDRs will not be an issue, due to a low market demand for TDRs in the city.

“We’re probably the only consumer of TDRs,” he said. “So we’ll have a number of sellers and we’ll have a number of folks to buy from.”

Even if they failed to get the necessary TDRs from private owners, YarrowBay’s Director of Development Colin Lund said there are other options available to them.

“We’re not concerned about that,” he said. “There are a few safeguards in the ordinance about our ability to meet the exact number.”

The alternative option would be to buy them from the city’s TDR bank, which currently holds 1,000 TDR certificates.

“Before they buy them (from us) the developer has to prove they went out and tried to purchase the TDRs,” Pilcher said.

There is a difference, however, between the privately owned TDRs and the TDRs in the bank. While the privately owned TDR certificates are derived from a specific piece of land, the TDRs in the bank were created automatically when the program was first started and are not tied to any land.

“It’s kind of like the Fed,” Pilcher said. “People complain they (TDRs) were created out of thin air, which is, frankly, true.”

At present, however, YarrowBay has yet to purchase any TDRs, according to Ross, for practical reasons.

“We don’t want to buy TDRs until we’re ready to start the development process,” he said.

Pilcher stated that several property owners have been issued TDR certificates, but none have been sold yet. He added that the estimated number of TDRs could vary.

“Some of these things will be fine tuned as people apply,” he said.

For example, if a property owner applied for a TDR certificate and it is discovered that a trailhead could be put on the property, it could bring a higher value to it. In order for this to occur, a planning commission process is held to prove its higher value.

Black Diamond’s TDR Program can be found here.