[Commercial Marketplace '97]

Snohomish County's Ship Has Finally Come In

Special to the Journal

If government officials and business boosters in Snohomish County are pinching themselves these days, it's mostly to make sure that the jump in economic growth isn't just a dream.

Economic prospects for the state are good, but Snohomish County's prospects are even better thanks to the good fortune of Boeing's health and completion of the Everett Homeport. While developers elsewhere are stuck with marginal sites, poor soils or wetland mitigation, there are plenty of buildable sites north of the King County line.

"People thought it would never happen. In fact, three to five years ago I didn't do a single deal in Everett," said Tim McMann, a commercial real estate broker for Washington Commercial Real Estate. "But the past two years the only deals I've done have been in Everett."

Brokers for industrial and retail property all say the reason for increased interest north of King County is that it's easier and cheaper to build here. Until two years ago, developers and business owners still concentrated on building in King County.

"But good sites in the Kent Valley dried up," McMann said. Permitting in King County is difficult, "but the city of Everett is still willing to deal."

Permitting in general is easier in Snohomish County. "They are more timely than King County," said Richard Embry, a project manager with Gramor Development which concentrates on retail. Government officials credit several years of effort they spent improving customer service at the permit center, according to John Roney, a liaison between the planning department and other county departments.

First the county implemented a staff training program to help make all interpretations of county regulations consistent. It started a program of quarterly breakfast meetings with developers to inform them of coming changes, and to hear complaints and ideas for improvements. Two years ago the county also created Roney's job, public service coordinator, so that disgruntled citizens had one person they could go to for help.

"We know we have a long way to go," Roney said. "We are now working on combining the zoning and development codes and cutting down on the bureaucracy in general."

Despite the county's efforts, getting through the critical areas ordinance and traffic mitigation fee studies can be a nasty experience. The county has had a hard time coming up with a critical areas ordinance that complies with the state Growth Management Act. The GMA Appeals Board has refused to accept two different versions. The big issue is how to protect areas that are going to be developed by a single family homeowner.

The county also gets a black mark from developers for its steep traffic mitigation fees. For its latest shopping center, about a mile east of Mill Creek, Gramor Development will pay $600,000 to Snohomish County for traffic mitigation, $120,000 to the state Department of Transportation and $25,000 to the city of Mill Creek.

"It's really an Achilles' heel for the county in some respects, but right now things are so prosperous the area will still do well," Embry said.

The county uses different methods to figure out the fees, depending on the type of development and the number of vehicle trips planned daily, said Tim Koss of the county public works and planning department. "And this is just a financial mitigation. There could be other items required," he said. "But the money is needed to allow the county to expand the transportation system and to account for development."

Everett and Monroe are the county's hot spots, mainly because they are on major transportation corridors. Seaway Center, a five-minute drive off of I-5 along SR 526, has had one million square feet of warehouse and light industrial space under construction or in the planning stages during the past 18 months. Housing developers are being attracted to the Monroe area because of easy access to Highway 9. And retail, though not ahead of the curve, is following close behind.

"It doesn't pay for us to be ahead of the population growth, but we are just finishing our second shopping center near Mill Creek and looking at other areas in the county," said Embry said.

The company works with a loose formula for its developments: Attract a grocer for an anchor tenant and then others such as video stores and fast food restaurants are likely to want in.

"Right now the grocers are very competitive and they are moving north, so we expect to do some other projects soon," Embry said. In general, owners plan to build in areas where the population will support their services 18 months to two years from now.

The picture for industrial development is just as rosy, according to Mike Livingston, a commercial broker with Cushman Wakefield. He said the place to be is Seaway Center near Paine Field. Its main advantage is that the city of Everett drew up a master plan for the area several years ago and only nominal permitting is required before construction can begin.

Though the site is located less than a mile from Boeing's Everett plant, none of the tenants are related to the aerospace industry, Livingston said. He is just finishing work on a 90,000-square-foot facility and a 185,000-square-foot building that was leased to several tenants.

He expects industrial buildings to remain smaller than 100,000 square feet, "but you never know when a company will come in from out of state or offshore and want a big facility." Most of the tenants are expected to be businesses relocating from the Eastside or south King County.

Another up-and-coming industrial site is located near Monroe and owned by Bud Welcome. Called Fryelands, the site already has street and utility improvements in place, said Gary Bullington, another Cushman Wakefield broker. Owners of that project are just starting to market it.

Housing developers, on the other hand look at the boost in development with a more wary eye. Because sites have gotten so hard to find, Dujardin Development dropped out of the construction side of the business a few years ago, and is now just concentrating on developing projects, according to Bill Fowler, vice president of development and construction.

One recent project, Lakewood Commons, is 244-condo units. It was started two years ago and Dujardin just sold off the last of the lots to a homebuilder.

"Many of the homeowners are driving south to Seattle and Bellevue for work," Fowler said. It is a long haul, but people are willing to make the trek for lower costs and a more rural lifestyle. Developers are able to put more houses onto a site, because potential owners are looking for lots that are easier to maintain.

But many of the newcomers are taking jobs in other cities, besides Seattle. The student population in Stanwood has doubled in the past six years with many of those families employed at the Boeing Everett plant or as civilians at the Navy Homeport. To accommodate the new students, the district is now remodeling two elementary schools and has an elementary school and a middle school under construction.

Livingston predicts the county will maintain this high level of growth for the next 18 months to two years.

Return to Commercial Marketplace top page

Copyright © 1997 Seattle Daily Journal of Commerce.