Nalley Valley poised to catch next wave By MARK GANDER Economic/Planning Services Tacoma is a pioneer among communities in the adaptive reuse of brownfield sites. Several innovative projects along the western shore of the Thea Foss Waterway and Puyallup Tribe properties serve as examples. The city is now seeing positive returns from the bet it took on the Thea Foss Waterway when it bought 27 acres, negotiated complex environmental agreements, cleaned it up and worked to develop it. What area is next for Tacoma? For the past years, the Economic Development Board for Tacoma-Pierce County has been providing leadership to restore the Nalley Valley district of South Tacoma. Authorities predict that the Nalley Valley is poised to catch the next wave of development that will crest in five years. In 1918, Marcus Nalley began making potato chips in South Tacoma. Nalley's Fine Foods has diversified and today is a major employer. Photo by Laura T. Coffey Erling Mork, president of the Economic Development Board, sees the Nalley Valley as having great potential as a distribution center and has committed his organization's resources to assist in the development and renewal of the Nalley Valley. The Nalley Valley may not be as glamorous as the Thea Foss, with its 1.5 miles of redevelopment which include a waterfront walkway, public event plazas and art spaces, marinas, shops -- and the future Chihuly Bridge of Glass linking the waterway with the Union Station Historical District. But the Nalley Valley is a vibrant and centrally-located district for industry in Pierce County. In 1918, Marcus Nalley began making potato chips in South Tacoma. The company later diversified into mayonnaise, salad dressing, pickles, relish and chili. Today, Nalley's Fine Foods is a major employer in a vibrant industrial district that bears its name. When you get to World Famous Bob's Java Jive, you'll know you've arrived in the Nalley Valley. The Nalley Valley District consists of 1,900 acres with 1,200 acres zoned industrial. Tacoma's federally-designated Enterprise Community partially overlaps the Nalley Valley. The Nalley Valley is connected to Thea Foss area by roadways, situated just below Center Street and bounded to the west by Orchard Street, to the east by South Tacoma Way and to the south by 74th Street. Bluffs, ridgelines, ravines, railyards and railroad tracks define topography of the Nalley Valley. The Nalley Valley District provides 12,000 jobs and has a population of 6,000 residents. The types of businesses operating in the Nalley Valley include food-processing, metal-working and finishing, painting and coating, plastics, general manufacturing, auto sales and parts, vehicle maintenance and repair, retail and commercial, and businesses associated with rail maintenance and operations. Large businesses include Nalley's Fine Foods (employing 1,000), General Plastics, Parker Paint and Atlas Foundry. As the major arterial running through the eastern edge of the Nalley Valley, South Tacoma Way serves as a large commercial and retail area with many auto-related businesses. Since the majority of the businesses employ 50 workers or less, they are acutely sensitive to the cost of doing business from regulatory, environmental and cleanup sources. Performance Radiator moved its international distribution center to the valley in 1996. The area is a hotbed with three Superfund sites -- that are near the end of their regulatory lifecycle. The Tacoma landfill (190 acres) is at the later stages of cleanup but requires continued monitoring and treatment by the city. Well 12A is at the final stages of cleanup while a groundwater treatment system continues to clean and protect the ground water. South Tacoma Field (270 acres) is at the later stages of soil cleanup and groundwater monitoring. But the Nalley Valley is overcoming this stigma. When redeveloped, the South Tacoma Field site will generate significant economic value and spur further investment. The aquifer system underlying this area is critical to the city's need for a safe and reliable source of drinking water, supplying as much as 35 percent of the total water demand during peak usage. The aquifer will become even more important for providing groundwater supplies in the future as surface water sources become more difficult to develop. Because of the high permeability of the soils, the groundwater is vulnerable to contamination from potential sources located above it. Why Nalley Valley? These assets make the Nalley Valley a great place to do business: Branch lines of the Burlington Northern-Santa Fe and Union Pacific railroads run through the Nalley Valley, facilitating the movement of freight and goods to ships docked at nearby Commencement Bay. Interstate 5 provides excellent access to high-capacity arterials. Existing infrastructure and utilities are already in place and are excellent endowments for new businesses. Tailored services provided by the state, city and Economic Development Board in environmental management, pollution prevention, permit and business assistance. A section of the 81-mile RTA commuter rail will operate through the Nalley Valley on existing tracks with a station in the vicinity of South 56th Street. The planned Pacific Northwest High-Speed Rail Corridor from Salem, Ore. to Vancouver, B.C. also will travel through the Nalley Valley. The opportunity exists to reuse a former Superfund site, the 270-acre South Tacoma Field, which is managed by Burlington Northern. The property's size and location present a tremendous opportunity for an industrial park and distribution center, while also serving as an overall economic catalyst for the rest of the Nalley Valley. Preliminary analysis estimates that about 500 acres of industrial property in the Nalley Valley are vacant or under-utilized. Based on research efforts and past studies, a significant portion of the industrial acreage is contaminated to some extent. However, according to Mork of the Economic Development Board, "the Nalley Valley District needs a strategic prioritization and economic re-use assessment of existing and suspected brownfields." Many Nalley Valley stakeholders echo Mork's sentiments in seeing that a systematic identification of the location, extent and characteristics of brownfields would go a long way to enhance the area's economic potential. In partnership with the Economic Development Board and other stakeholders, the city of Tacoma submitted a recent grant application for funding under the U.S. Environmental Protection Agency's Brownfields Redevelopment Initiative. The actions to be undertaken included community outreach, environmental due diligence and property screening analysis and implementation of funding sources and area-wide designations for brownfield redevelopment. For many properties it is impracticable to meet a point of compliance at each property boundary. Criteria for determining which sites will be considered "areawide brownfields" should apply to those sites with multiple property owners and multiple sources of groundwater contamination. Although the city was unsuccessful in securing EPA brownfield grant funding, other avenues of support are being pursued. The South Tacoma Way businesses have organized and are now part of the Neighborhood Business District Program coordinated by the city. And recent changes to the state's Model Toxics Control Act regulations are an encouragement to businesses and stakeholders championing the Nalley Valley's restoration potential. From his Tacoma office, Dave Douglas, senior vice president of the real estate brokerage and development firm Kidder Mathews & Segner underscores the market dynamics: "The long-term supply of available, buildable industrial land is tight. We currently have just an 18- to 24-month supply of buildable land in North Pierce County," Douglas said. "Any new supply of industrial land will be propelled by annexations in Fife and Puyallup and improvements to the Sumner interchange at State Route 167 and North 24th Street. "After that, in Pierce County, we estimate only a five- to seven-year supply of developable land exists in our prime market area," he said. South Pierce County properties in the Frederickson area are limited by transportation issues. Douglas said Frederickson works for some manufacturers but not for distribution. Looking north at the 1,900-acre Nalley Valley District. Photo by Aerolist Photographers "Most of our industrial demand is driven by the distribution market. They want to be near the Port of Tacoma and I-5. Therefore, when the land supply on greenfield sites in the valley is absorbed, the next wave of development will need to occur on brownfield properties and especially within districts like the Nalley Valley," Douglas said. A new business that is serving as an example for other businesses to follow is Performance Radiator. The company selected the Nalley Valley for its International Distribution Center in May 1996 and now employs 27 workers in a modern facility on South Tacoma Way. After trying to locate in Seattle or the Kent Valley, the company opted to redevelop a four-acre contaminated property that was a former car dealership and adjacent to a Superfund site rather than occupying a new building or "paving a pasture," said Performance Radiator Manager Tim Pavolka. "Locating in the Nalley Valley along South Tacoma Way made more sense and provided better value to us," Pavolka said. Roads and utilities were already in place; land costs were lower relative to Kent; there was better utilization of land, lot coverage and zoning compared to other sites; soil conditions were vastly better to construct a new state-of-the-art distribution facility; visibility was high and customers were close. Pavolka also liked that the property was centrally located, near the Port and I-5. Mark Gander works as an economics, planning and transportation consultant with a specialty in brownfield redevelopment. He has completed projects in the Nalley Valley/South Tacoma and the Duwamish Waterway/Industrial Corridor. Send questions or comments to his E-mail address.