May 29, 2000

Quendall Landing: the next move is Renton's

Paul Allen's $6.5 million purchase of the Baxter site on Renton's Lake Washington shore doesn't put the Microsoft co-founder's colossal Renton proposal back on track -- yet.

Several other significant moves remain, such as gathering $20 million to cleanup another third of the overall site and $60 million to pay for street and highway improvements.

At 20 acres, the Baxter property is roughly the northern third of the 68-acre Port Quendall site on which Allen and two other developers envision building 1 million square feet of offices, 700,000 square feet of retail, 1,300 housing units and two hotels.

The city of Renton is working under a June 30 option to buy the most-polluted middle third, known as the Quendall Terminals site. The city hopes to simultaneously resell the property it to a developer -- presumably Allen, but not necessarily.

The city won't buy the land from the Altino family unless the city first receives state approval of a cleanup plan, said Sue Carlson, Renton's administrator of economic development, neighborhoods and strategic planning. The Department of Ecology typically doesn't give approval without seeing that money to pay for the cleanup is in place, Carlson said.

The city estimates removing Creosote and other pollutants will cost about $20 million. Carlson's office is trying to arrange $10 million in federal grants and borrow $10 million, possibly in bond funds, she said. At least a portion of the borrowed money might be paid back through selling the property.

"We won't move forward until we've got a consent decree," Carlson said. "We've submitted an action plan. The department has come back with comments and we're responding to those. Then we can have the public comment on the plan."

Microsoft co-founder Allen went through a similar process to receive a consent decree for an estimated $7 million clean-up of the Baxter site before he recently closed on buying the site from J.H. Baxter & Co. Pollution from earlier timber operations affects five of the 20 acres. Property records show an Allen entity named Port Quendall Co. paid $6.5 million for the Baxter site.

The next big obstacle is arranging a substantial upgrade of the intersection of Interstate 405 and Northeast 44th Street and related street improvements.

The recently enacted state budget includes $1.6 million that Renton requested to pay for part of the cost of planning the road project, Carlson said. The city and Allen each committed to contribute like amounts to pay for the planning, she said.

"We want all the planning done by November-December so we can go to the Legislature in the next session," asking for a large portion of the estimated $60 million cost of the road work, Carlson said.

"It probably will take another 18 months from then to do the design and engineering," she said. "We're thinking that if everything comes together, some time in 2004 we could have the interchange completed."

Yet another moving piece in the full Port Quendall project is a pending sale of the bottom third of the 68-acre site, known as the Barbee Mill property. The Cugini family earlier this year put the Barbee Mill property up for sale for about $25 million and it remains on the selling block.

Real estate sources describe that as a high asking price, suggesting the Cuginis aren't overly eager to sell.

Allen, through his operating company Vulcan Northwest, made a hard run at putting together the full Port Quendall project three years ago but backed off when the severity of the pollution and traffic problems became apparent. When Vulcan backed off, Allen's representatives said they weren't abandoning the project, just slowing down to find ways to resolve those issues.

Vulcan at the time went through with buying an 8-acre parcel called the Pan Abode site that is a potential part of the overall Port Quendall site.

Late last year, Opus Northwest, one of the Puget Sound area's most active office and industrial developers, teamed with Allen to resurrect the Port Quendall project, now called Quendall Landing.

A third company, the Virginia-based retail developer The Mills Corp., joined the partnership to provide retail expertise.

Opus head Tom Parsons said it remains possible that a fourth developer, one that specializes in residential work, would join the partnership. One option may be that the residential developer buy the Barbee site on its own as the developer's entree into the deal.

"It's a real complicated project," Parsons said this week. "It's going to take a lot of time to figure out."

Another remaining obstacle is having the public review it all.

"We don't want the public to think we have a project proposal yet," Carlson said. "There's a whole lot of work yet before we take it to the public.