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12-09-2006, 01:39 AM
http://www.bizjournals.com/seattle/stories/2006/12/04/focus2.html?b=1165208400^1384035
Next big thing? Bel-Red becomes arena of change
Puget Sound Business Journal (Seattle) - December 1, 2006
by Jeanne Lang Jones
Staff Writer
Even as construction sites crowd its downtown, Bellevue already is thinking about its next boom neighborhood.
In January, city planners will release a draft environmental impact statement for redevelopment along the Bel-Red Corridor, which runs along Highway 520 southeast of its intersection with Interstate 405.
Studded with aging office buildings and warehouses, the corridor experienced a 6 percent drop in employment between 1995 and 2003. The city hopes broadening the zoning guidelines within the 900-acre light-industrial area will add thousands of jobs and residents over the next 25 years.
Despite these ambitions, city leaders vow that Bel-Red will never be a high-rise forest.
"One of the major principles of Bel-Red that's been important from the get-go is that the planned use complement, not compete with downtown," said project manager Kevin O'Neill. "We are not looking to create a new downtown, or put in a land use that would be more appropriate in the city center."
The biggest issue in evaluating competing zoning proposals will be how traffic and mass transportation are managed, O'Neill said. Those issues were knotty even before the new owners of the Seattle SuperSonics and Storm basketball teams started talking about the possibility of putting their desired new arena in the corridor.
Located a few blocks south of -- and roughly parallel to -- State Route 520, Northeast Bellevue-Redmond Road connects downtown Bellevue to Redmond. The Bel-Red Corridor cuts a swath from Interstate 405 to the Overlake shopping district at 148th Avenue Northeast. It includes a triangular wedge of land east of Redmond city boundaries that is sandwiched between Bel-Red Road and 156th Avenue Northeast near Crossroads Shopping Center.
Bel-Red -- and a stretch of 116th Avenue Northeast where Bellevue's Auto Row and Overlake Hospital and Medical Center are located -- are the two areas of the city that planners expect will be most ripe for redevelopment after downtown finishes its current growth spurt. It also helps that Sound Transit eventually plans to run light rail through the area to better connect Seattle to Redmond, where Microsoft Corp.'s headquarters are located.
Built out in the 1970s and '80s, the Bel-Red Corridor today is dominated by aging light-industrial warehouses, one- and two-story "woody walk-up" office buildings and small strip shopping centers where neighborhood residents go to get a car repaired or chair reupholstered. Along Northeast 20th Street, more upscale retailers sell Oriental rugs, home and gardening supplies, Harley-Davidson motorcycles and luxury cars.
Large landowners currently include Safeway, Cadman Inc., Willamette Industries and JSH Properties. Anticipating Bel-Red's future redevelopment, an affiliate of home builder Burnstead Construction Co. recently paid $20.2 million for a 5.4-acre property on 124th Avenue Northeast near Bel-Red Road.
Meanwhile, a partnership between Seattle-based Wright Runstad & Co. and San Francisco-based Shorenstein Properties LLC is in the process of buying a 36-acre distribution center across the street that Safeway no longer needs, for an undisclosed amount. This is the site being eyed for a Sonics arena.
Why so much action? A study by Portland-based Leland Consulting Group projects that by 2030 the Bel-Red Corridor could support:
* 2.5 million to 3.9 million square feet of additional office space, including a campus for a large software, engineering, environmental or financial services firm.
* 200 to 300 more hotel rooms for business travelers in smaller hotels located near the office campuses.
* 200,000 to 400,000 square feet of additional retail space, including new restaurants, a health club and services such as dry cleaners.
* 2,500 to 5,000 residential units located in mid-rise "urban village" style complexes, mainly for retirees and Overlake Hospital and Microsoft employees.
* One or two more upscale auto dealerships for Auto Corner at Northeast 20th Street and 140th Avenue Northeast.
Changing zoning guidelines could transform the area over the next quarter-century. The four redevelopment proposals being weighed include:
* Do nothing: Retain light industrial usage east of Overlake Hospital, with general commercial use farther east and low-density office development along Bel-Red Road.
* Moderate growth: Add 3.5 million square feet of new commercial development and 3,500 housing units.
* Less office, more housing: Add 2.5 million square feet of commercial development and 5,000 housing units.
* High growth: Add 4.5 million square feet of new commercial space and 5,000 housing units.
"This has been a very deliberate process we've gone through looking at the alternatives within the parameters given us by the City Council," said Bel-Red Corridor Steering Committee co-chairman and former Bellevue Mayor Mike Creighton. "These parameters are very limited. We are not working with a blank canvas."
Perhaps surprisingly, there has been almost no official discussion of placing a new arena for the Seattle Supersonics and Storm basketball teams on the old Safeway distribution center site. That's partly because the teams' sale only recently concluded, and the Safeway site sale won't be completed until the end of this year.
"We have not been approached by the ownership of the Sonics so, as far as we are concerned, there is nothing we can respond to," said Wright Runstad President Greg Johnson.
"As we look at the site today," he said, "the mix of uses doesn't, in our view, include a Sonics arena."
Johnson cautions that developers are just in the initial stages of formulating their plans for the site. However, he said his firm likely will favor allowing the maximum possible development. Calling it "regional smart growth 101," Johnson said putting high-density development around the proposed transit line is the best way to capitalize on the Bel-Red Corridor's central location on the Eastside.
The surrounding residential neighborhoods have raised some concerns about increased traffic. Area landowners want to know how proposed changes might affect their land values, while their tenants are concerned about new office and residential development driving up area rents and potentially squeezing them out.
"It's a balancing act between wanting to protect the neighborhood impacted by the area's redevelopment and at the same time trying to allow for growth to come to the city," said steering committee member Doug Mathews, a city planning commissioner.
There is concern whether small service businesses such as auto repair shops would be driven out of the area by redevelopment. But Mathews said such businesses have survived in Portland's redeveloped Pearl District.
The key factors in their survival, he said, seem to have been whether these businesses owned their own property and whether demand for their services was high enough to support rising rents.
Another option might include grandfathering in some of Bel-Red's traditional light industrial businesses as zoning guidelines change.
The Bel-Red steering committee is expected to make its final recommendation to the City Council in late spring.
Next big thing? Bel-Red becomes arena of change
Puget Sound Business Journal (Seattle) - December 1, 2006
by Jeanne Lang Jones
Staff Writer
Even as construction sites crowd its downtown, Bellevue already is thinking about its next boom neighborhood.
In January, city planners will release a draft environmental impact statement for redevelopment along the Bel-Red Corridor, which runs along Highway 520 southeast of its intersection with Interstate 405.
Studded with aging office buildings and warehouses, the corridor experienced a 6 percent drop in employment between 1995 and 2003. The city hopes broadening the zoning guidelines within the 900-acre light-industrial area will add thousands of jobs and residents over the next 25 years.
Despite these ambitions, city leaders vow that Bel-Red will never be a high-rise forest.
"One of the major principles of Bel-Red that's been important from the get-go is that the planned use complement, not compete with downtown," said project manager Kevin O'Neill. "We are not looking to create a new downtown, or put in a land use that would be more appropriate in the city center."
The biggest issue in evaluating competing zoning proposals will be how traffic and mass transportation are managed, O'Neill said. Those issues were knotty even before the new owners of the Seattle SuperSonics and Storm basketball teams started talking about the possibility of putting their desired new arena in the corridor.
Located a few blocks south of -- and roughly parallel to -- State Route 520, Northeast Bellevue-Redmond Road connects downtown Bellevue to Redmond. The Bel-Red Corridor cuts a swath from Interstate 405 to the Overlake shopping district at 148th Avenue Northeast. It includes a triangular wedge of land east of Redmond city boundaries that is sandwiched between Bel-Red Road and 156th Avenue Northeast near Crossroads Shopping Center.
Bel-Red -- and a stretch of 116th Avenue Northeast where Bellevue's Auto Row and Overlake Hospital and Medical Center are located -- are the two areas of the city that planners expect will be most ripe for redevelopment after downtown finishes its current growth spurt. It also helps that Sound Transit eventually plans to run light rail through the area to better connect Seattle to Redmond, where Microsoft Corp.'s headquarters are located.
Built out in the 1970s and '80s, the Bel-Red Corridor today is dominated by aging light-industrial warehouses, one- and two-story "woody walk-up" office buildings and small strip shopping centers where neighborhood residents go to get a car repaired or chair reupholstered. Along Northeast 20th Street, more upscale retailers sell Oriental rugs, home and gardening supplies, Harley-Davidson motorcycles and luxury cars.
Large landowners currently include Safeway, Cadman Inc., Willamette Industries and JSH Properties. Anticipating Bel-Red's future redevelopment, an affiliate of home builder Burnstead Construction Co. recently paid $20.2 million for a 5.4-acre property on 124th Avenue Northeast near Bel-Red Road.
Meanwhile, a partnership between Seattle-based Wright Runstad & Co. and San Francisco-based Shorenstein Properties LLC is in the process of buying a 36-acre distribution center across the street that Safeway no longer needs, for an undisclosed amount. This is the site being eyed for a Sonics arena.
Why so much action? A study by Portland-based Leland Consulting Group projects that by 2030 the Bel-Red Corridor could support:
* 2.5 million to 3.9 million square feet of additional office space, including a campus for a large software, engineering, environmental or financial services firm.
* 200 to 300 more hotel rooms for business travelers in smaller hotels located near the office campuses.
* 200,000 to 400,000 square feet of additional retail space, including new restaurants, a health club and services such as dry cleaners.
* 2,500 to 5,000 residential units located in mid-rise "urban village" style complexes, mainly for retirees and Overlake Hospital and Microsoft employees.
* One or two more upscale auto dealerships for Auto Corner at Northeast 20th Street and 140th Avenue Northeast.
Changing zoning guidelines could transform the area over the next quarter-century. The four redevelopment proposals being weighed include:
* Do nothing: Retain light industrial usage east of Overlake Hospital, with general commercial use farther east and low-density office development along Bel-Red Road.
* Moderate growth: Add 3.5 million square feet of new commercial development and 3,500 housing units.
* Less office, more housing: Add 2.5 million square feet of commercial development and 5,000 housing units.
* High growth: Add 4.5 million square feet of new commercial space and 5,000 housing units.
"This has been a very deliberate process we've gone through looking at the alternatives within the parameters given us by the City Council," said Bel-Red Corridor Steering Committee co-chairman and former Bellevue Mayor Mike Creighton. "These parameters are very limited. We are not working with a blank canvas."
Perhaps surprisingly, there has been almost no official discussion of placing a new arena for the Seattle Supersonics and Storm basketball teams on the old Safeway distribution center site. That's partly because the teams' sale only recently concluded, and the Safeway site sale won't be completed until the end of this year.
"We have not been approached by the ownership of the Sonics so, as far as we are concerned, there is nothing we can respond to," said Wright Runstad President Greg Johnson.
"As we look at the site today," he said, "the mix of uses doesn't, in our view, include a Sonics arena."
Johnson cautions that developers are just in the initial stages of formulating their plans for the site. However, he said his firm likely will favor allowing the maximum possible development. Calling it "regional smart growth 101," Johnson said putting high-density development around the proposed transit line is the best way to capitalize on the Bel-Red Corridor's central location on the Eastside.
The surrounding residential neighborhoods have raised some concerns about increased traffic. Area landowners want to know how proposed changes might affect their land values, while their tenants are concerned about new office and residential development driving up area rents and potentially squeezing them out.
"It's a balancing act between wanting to protect the neighborhood impacted by the area's redevelopment and at the same time trying to allow for growth to come to the city," said steering committee member Doug Mathews, a city planning commissioner.
There is concern whether small service businesses such as auto repair shops would be driven out of the area by redevelopment. But Mathews said such businesses have survived in Portland's redeveloped Pearl District.
The key factors in their survival, he said, seem to have been whether these businesses owned their own property and whether demand for their services was high enough to support rising rents.
Another option might include grandfathering in some of Bel-Red's traditional light industrial businesses as zoning guidelines change.
The Bel-Red steering committee is expected to make its final recommendation to the City Council in late spring.
