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December 19, 2011

'Community management' key to Pike/Pine's success

By KATIE ZEMTSEFF
Journal Staff Reporter

Photos by Katie Zemtseff [enlarge]
Michael Wells of the Capitol Hill Chamber of Commerce said getting Elliott Bay Books signaled to the rest of the city that Pike/Pine is the place to be.

Seattle's Pike/Pine neighborhood has gone from a sleepy corner of Capitol Hill to a beehive, and some of the people involved in that dynamic growth say a lot of the success is because of something called community management.

Community management means that landlords are selective about choosing tenants who will make the area more active and attract different types of people. They also are alert and responsive to changes happening in the neighborhood.

In recent years, Pike/Pine has seen explosive growth in restaurants and bars, which is great for landlords, but it also makes them wary about pushing out retail.

Michael Malone, the founder and CEO of Hunters Capital, said the goal is to avoid becoming another Belltown. He said Belltown used to have retail that attracted people during the day, but gradually it became a place filled with night clubs, restaurants and condos.

“That's fine, but during the day, it's nothing,” he said. “And a living environment is 24 hours. There's day and there's night.”

The effort to keep Pike/Pine balanced depends on property owners like Malone, Liz Dunn, Maria Barrientos, Ted Schroth and Anne Michelson, and on groups like the Capitol Hill Chamber of Commerce and Capitol Hill Housing.

Michael Wells of the Capitol Hill Chamber of Commerce said everyone, including the restaurant operators, recognizes the risk and wants more retail, but people are afraid to invest in new businesses right now.

Michael Malone has an office in his Broadway Building. The new space was designed to look old.

“The night-time life and the day-time life of Pike/Pine really need to balance each other out,” Wells said, “and we need places for people to shop, but the problem is people are still nervous about shopping.”

Hunters Capital has a big impact because it owns a number of Pike/Pine buildings. Malone said in the last four years Hunters has built or renovated more than 420,000 square feet in Pike/Pine, bringing new residents and 360 new employees into Pike/Pine.

Malone has worked in the neighborhood for 40 years. He's a developer, though he doesn't like the term because he associates it with buying and selling. Hunters Capital often buys 100-year-old buildings, does extensive retrofits, and holds onto them.

Malone said old buildings reflect the neighborhood's character, and can command higher rents because young, creative firms often like them better than new space.

One of Malone's latest projects is the 28,000-square-foot Ballou Wright building, originally named after an auto parts distribution company but known for years as the Coho. Hunters Capital changed the name back and added old pictures to the lobby to reflect its history.

“That's the fun of it. It's not just a cool space that you have, but a cool space that was. Its past becomes part of its present,” Malone said. “That gives it a life for another 100 years.”

Hunters Capital is considering buying two more properties, and has been talking to their owners for about eight years. Malone said the buildings are beautiful and deserve to be saved, rather than demolished.

Wells, who used to own Bailey Coy Books on Broadway, said Capitol Hill was once centered on Broadway but Pike/Pine is its new heart. “I've seen Pike and Pine go through dramatic changes in a brief period of time.”

Wells said all the new restaurants and bars have helped, but for him the watershed moment was when Hunters Capital signed Elliott Bay Books. That signalled to the rest of the city that Pike/Pine is the place to be.

Michael Oaksmith, vice president of development for Hunters Capital, said when Elliott Bay's team first saw the space that became the new store they weren't sure it would work. Oaksmith said he took them across the street to the 1514 10th Avenue Building to show them what was possible.

Malone paid for Elliott Bay to move because he said it was important for the neighborhood to have a gathering place that would also attract new people to visit.

Malone said Pike/Pine is successful because it is centrally located and has a 30-year history of attracting artists and musicians. The trick is to maintain that “creative spark.”

Everyday Music, next to Elliott Bay Books, said recently it is moving out. Jill Cronauer, director of property management, said Hunters Capital chose not to list the space because they didn't want another restaurant or bar. The new tenant is Totokaelo, a high end clothing business, which should attract people during the day.

Malone built the mixed-use Broadway Building, which came online during the depths of the recession. He said it was a struggle to find retail tenants that support the neighborhood's diversity, but he thinks they all add to the neighborhood, with chains like GameStop and Panera, as well as smaller tenants like Genki Sushi.

Finding office tenants for the Broadway Building was also challenging because young firms want old space. Malone said even he was wary about moving into the Broadway Building, but he said Oaksmith did his office in a way that makes it feel older and comfortable.

Malone said Pike/Pine still needs more housing and he'd like to find a way to create small high-quality units with lower rents, similar to projects found in New York and Japan.

Even though it remains tough to attract more retail now, Wells said community management will pay off.

“It really helps things from spinning out of control,” Wells said. “You can get ahead of the issues before they come up instead of waiting 10 years down the road (and realizing) no one's been paying attention.”

12th Avenue Arts

One important new project for the community is called 12th Avenue Arts. When Oddfellows Hall was sold, a number of creative tenants lost their low-rent spaces. The community realized it needed a space that would help support theater groups and nonprofits.

The end result is the $38 million 12th Avenue Arts, led by Capitol Hill Housing. The organization is buying a 31,000-square-foot parking lot near the Capitol Hill police station. CHH will build secure underground parking for the Seattle Police Department, which will buy back the space. A six-story building above the parking will have neighborhood retail, a small performance space, two floors for nonprofit offices and 88 affordable apartments on four floors.

Construction is scheduled to begin in 2012.

Malone said the project shows the community recognizes it needs to help maintain its social diversity.

Transit oriented development near Sound Transit's Capitol Hill Light Rail Station will also have a huge impact, Wells said.

How can other neighborhoods replicate Pike/Pine's success? Malone and Wells agree leadership is the key.

Prominent community members need to sit down over coffee, figure out what they want the neighborhood to become and figure out how to get there.

“Take ownership,” Malone said. “With ownership comes pride and communication, and the sense of community.”


 


Katie Zemtseff can be reached by email or by phone at (206) 622-8272.


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